>RELIANCE CAPITAL (KOTAK SECURITIES)

Diversified financial services play: Reliance Capital is focused on businesses across the spectrum of financial services, including life insurance, asset management, retail broking and distribution. We expect its strong parentage and large capital base to help it achieve a substantial market share over time. However, we believe that the current market price is somewhat ahead of its fundamentals and we therefore initiate coverage with a REDUCE rating.

■ Life insurance and asset management businesses add most value to our SOTP
■ Focus on wide reach, superior pricing strategy across businesses
■ Financials: Core profitability yet to be demonstrated
■ Key risks: Execution, competition

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