June 2010
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Mukesh Ambani set to enter financial services

After making a re-entry into telecom, Reliance Industries Limited chairman Mukesh Ambani has now set himself a new target. He wants to manage your money.

RIL has now tied up with global financial services giant DE Shaw to offer financial services.

Trading in energy, carbon and derivatives may be offered and the joint venture may also look at offering private equity and mutual funds. However, the joint venture may not want to secure a banking licence yet.

RIL sources confirmed to NDTV that the announcement regarding the joint venture will be made shortly.

As double income families drive the consumption boom in the urban areas of the country, often buying products or services on credit, the financial services companies are sensing a never before opportunity for expansion in India. They are even tying up with global names helps give them a global footprint.

Two per cent of Indians invest in the equity market and only 4 per cent apportion their money for mutual funds.

It is not just RIL, but other corporates too who are betting big on the financial services space in India.

Sumitomo Mitsui Banking Corporation on Wednesday announced that it would invest Rs 1366 crore for a 4.5 per cent stake in private sector lender Kotak Mahindra Bank.

Commenting on the deal, Uday Kotak, vice chairman and MD of Kotak Mahindra Bank, said: “This MoU is a great way to get ourselves the ability to tap into those savings in Japan for India's growth. We have very big strategic opportunity in India to grow ourselves. We see pools of capital, savings, networks, relationshipswith corporateas of Japan being able to available to us through this relationship.”

Historically, despite the good savings record that Indians have, the number of people who put money in equities or make investments in mutual funds is a paltry figure. What continues to be a worry for the stock market regulator is that the number of people who invest in the stock markets has remained constant over nearly two decades now.

Source: NDTV Profit

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