Flush with billions of dollars in cash, Mukesh Ambani-led Reliance Industries Ltd (RIL) has parked more than Rs 800 crore (Rs 8 billion) in various mutual fund schemes of younger sibling Anil-led Reliance Group.
RIL has made these investments, totalling over Rs 800 crore, mostly in the Fixed Maturity Plans and other debt schemes of Reliance Mutual Fund, market sources said.
Reliance MF is part of Anil Ambani-led group's financial services arm Reliance Capital Ltd.
Incidentally, RIL and Anil Ambani group yesterday announced their first business partnership since a bitter family split in 2005.
The two groups have agreed to share optic fibre cables and other telecom infrastructure including telecommunications towers for their respective ventures, Reliance Jio Infocomm and RCOM in a Rs 1,200-crore (Rs 12 billion) deal.
The two groups, which about three years ago had scrapped a non-compete agreement between them, have now also agreed for a comprehensive framework of business cooperation.
RIL's investment in Reliance MF schemes, which has been made over a period of last eight months, comes as a clear departure of the oil-to-retail conglomerate's earlier stance of parking surplus funds into almost all the mutual funds, expect on those run by the Anil Ambani-led group.
At the end of fiscal 2011-12 ended March 31, 2012, RIL had invested over Rs 8,700 crore (Rs 87 billion) in various mutual fund schemes, including Fixed Maturity Plans (FMPs),
but they did not include any scheme of Reliance MF.
In contrast, RIL has always figured prominently in the stock portfolios of various schemes of Reliance Mutual Fund.
At least 13 schemes of Reliance Mutual Fund had RIL as one of the biggest stock in their respective portfolios as on March 31, 2012 and together these funds held RIL shares worth well above Rs 500 crore (Rs 5 billion).
According to market sources, there was a clear change in RIL's investment strategy in the last fiscal 2012-13 in terms of deployment of excess cash in mutual funds.
RIL holds one of the biggest cash balance among all the corporates in the country.
It had cash and cash equivalent of Rs 80,962 crore (about $15 billion) as on December 31, 2012. A large portion of these funds are parked in bank deposits, certificates of deposit, mutual funds, government bonds and securities.
RIL's outstanding debt as on December 31, 2012 stood at Rs 72,266 crore (Rs 722.66 billion), making it a debt free company on net basis.
Its investments in various mutual funds had risen substantially from Rs 5,897 crore (Rs 58.97 billion) in 2010-11 to Rs 8,781 crore (Rs 87.81 billion) in 2011-12.
The Reliance MF schemes that had significant exposure to RIL at the end of 2011-12 included its Growth Fund, Vision Fund, Power sector fund, Quant Plus Fund, Equity Opportunities Fund, Top-200 Fund, Natural Resources Fund and ELSS Fund.
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RIL has made these investments, totalling over Rs 800 crore, mostly in the Fixed Maturity Plans and other debt schemes of Reliance Mutual Fund, market sources said.