ADAG exiting Wall Street Fin a year after taking reins

The Anil Ambani Group is exiting Wall Street Finance, a company where it had acquired a substantial stake less than a year ago. Reliance Capital had structured a strategy whereby its arm Reliance Money Express Ltd would have almost become a non-cheque issuing bank through this acquisition.

“We have decided to exit our investment in Wall Street Finance as the business conflicts with Reliance Money Express,” Sudip Bandyopadhyay, managing director, who had piloted the deal, said.

Bandyopadhyay is said to have put in his papers at Reliance Money some months back. But he was quick to clarify the two are not linked. “This has nothing to do with change in leadership. We have merely decided to focus on certain core activities such as money-transfer and money-changing,” said Bandyopadhyay.

Reliance Money will also be exiting for a neat profit of Rs 6-7 crore. It had acquired the shares at around Rs 36-38 against the current market price of Rs 51.

The exit will take place through inter se transfer on September 3, and the stake is being acquired by Transways Combines Pvt Ltd, a promoter of Wall Street Finance.The acquirer will buy 42,82,055 shares constituting 36.83% of the company. It had no previous holding in the company.

Of these 42,52,055 shares would come from Reliance Money, while the rest would be sold by five other entities also from the Reliance ADAG group — Reliance Money Infrastructure, Reliance Financial, Reliance Prime International, Reliance Securities and Reliance Commodities will all offload 6000 shares each.

Since all the parties involved are part of the current stakeholders in the company, it would be treated as an inter se transfer. “I got Reliance Money into the company to bring value, to go global. But they seem to have had a change of plan. So now we go out on our own … unless we get somebody compelling,” said Arif Patel, promoter and director of Wall Street Finance.

“The market is huge, is is wide open. We have been doing this business for 25 years. We were competing with Reliance Money earlier, I guess we return to that now. You can’t be unhappy in bed, you see,” Patel said.

Reliance Money had taken a stake in Wall Street Finance by buying into Wall Street Construction, which owned 33.55% stake in the company, in October 2008.

Through the deal, Reliance Money acquired a non banking finance company (NBFC) licence as well as a money remittance licence, which is very hard to get from the Reserve Bank of India. The company then gradually increased the stake to 36.58% through market acquisition of shares.