Reliance Capital Ltd shares gained 25% over the past week, beating the broader market’s 6% gain. The company announced it will expand its tie-up with Nippon Life Insurance Co. to include businesses such as asset management, but there are a couple of other things that acted as triggers for the stock.
One is the finance ministry circular that insurance firms that have finished 10 years of existence can sell a stake. Reliance Life will turn 10 next January. The Rs. 3,000 crore Nippon deal is a “strong stock catalyst as it will not only validate valuation for the insurance business, but also address liquidity concerns”, JP Morgan India Pvt. Ltd pointed out in a recent note.
Secondly, the Reserve Bank of India’s recent guidelines for banking licences are seen as a positive for Reliance Capital because it meets norms such as the broking business accounting for less than 10% of income or assets, etc.
No comments:
Post a Comment