In a statement issued here, Reliance Capital said the transfer of Reliance Commercial Finance into a separate wholly owned subsidiary was approved by 99.99 per cent of the company shareholders at the court convened meting held on Saturday.
Thanking the shareholders for their approval Sam Ghosh, Executive Director and Group CEO, Reliance Capital said: "The proposal will enhance management focus and also provide flexibility to the company to unlock value through stake sale."
According to Ghosh, the transfer will align Reliance Commercial Finance with overall operating strurcture of Reliance Capital where all operating businesses are held in its wholly or majority owned subsidiaries.
As per the scheme, the commercial finance division of Reliance Capital was proposed to be merged into Reliance Gilts Limited, a wholly owned subsidiary of Reliance Capital.
"This merged entity was to be renamed Reliance Commercial Finance Limited. Reliance Gilts Limited has now been renamed as Reliance Commercial Finance Limited," the statement added.
The transfer, which has been approved by the shareholders, will be effective from April 1 and will now be filed for requisite court and regulatory approvals.
Reliance Commercial Finance is amongst the leading small and medium enterprises lenders in the Indian non-banking finance space with a focus on asset backed lending and productive asset creation.
The company has an aggregate asset under management (including securitised portfolio) portfolio of Rs 16,451 crore ($2.5 billion) as of June 30.
The transfer will also enhance employee engagement and retention through ability to grant Employee Stock Ownership Plan (ESOP) in the business.
Reliance Nippon Life Insurance and Reliance Nippon Life Asset Management, both subsidiaries of Reliance Capital, already have a strategic partner - Nippon Life Insurance - with 49 per cent stake.
