Hiccups at Reliance Money? Chief to exit in Sept

Sudip Bandyopadhyay, the face of Reliance Money, Reliance Capital’s broking, distribution and money transfer arm, is on his way out.

Sources told DNA he is likely to continue with the brokerage-cum-money transfer major till September.He is said to be joining a media and entertainment company.

But Bandyopadhyay denied any such move. “It’s baseless. I am still with Reliance Money,” he said. The stage for his exit was set about three months ago, when Reliance Money had “elevated” him to a position of managing director, the sources said.

In April, Reliance Money appointed  Jhuma Guha as CEO - OTC services, while Kapil Bali took over as CEO - broking & distribution. The exchange business is being piloted by former BSE chief Rajnikant Patel.

None of these three officials were available for a comment. Under Bandyopadhyay, Reliance Money expanded rapidly since inception in April, 2007.

At peak, it claimed to have over 3.5 million customers and a presence in 5,165 cities, apart from partnerships & businesses in key overseas markets. In October 2008, it acquired Wall Street Finance, a money transfer and money exchange business from the Patel family (of Patel Roadways).

It also bought a 10% stake in NMCE, an Ahmedabad-based commodity exchange and had taken efforts to set up a nationwide spot exchange. Bandyopadhyay had told DNA Money in December that the exchange will start operations in early 2009.

However, the subsequent downturn seemed to have made a dent. DNA Money first reported the troubles faced by Reliance Money’s rural franchisees’ in Pune district.
Though the company denied it, all was not well with rumours about large-scale firings. The exit of Bandyopadhyay was in the scuttlebutt in April, soon after his “elevation”.

“All of Reliance Money’s businesses are new. And none of them is making money. This can’t go on. The pruning had to happen,” said a senior market hand, who did not wish to be named.

A Reliance Money official confirmed the company recently moved out of the swank Worli office, which was named ‘Reliance Money House’, to a much smaller premises.
Some market watchers said the maladies began when ADAG floated a separate  institutional broking arm called Reliance Equity International.

With the high-volume institutional broking income going to this new arm, Reliance Money was deprived of a crucial revenue stream. Since then, Reliance Money has been positioned as a retail broking arm, but retail investors are an endangered species in a bear market, being spotted rarely. This may lead to some rejiggering of this side of the business, sources said.

In June last year, ADAG had hired Deutsche Bank AG’s former head of Indian equities, Keshav Sanghi to head Reliance Equities International.