Extensive SWOT Analysis of Reliance Capital- Financial Solution of India

About Reliance Capital Limited

Reliance Capital has businesses in asset management, mutual funds, life insurance, and general insurance, commercial finance, home finance, stockbroking, wealth management services, distribution of financial products, private equity, asset reconstruction, proprietary investments, and other activities in financial services. 

Reliance Capital Limited was incorporated in 1986 at Ahmedabad in Gujarat as Reliance Capital & Finance Trust Limited. The name Reliance Capital came into effect on 5 January 1995. In 2002, Reliance Capital Ltd shifted its registered office to Jamnagar in Gujarat before it finally moved to Mumbai in Maharashtra, in 2006.

Services Provided by Reliance Capital Limited:

Following are the different financial services provided by Reliance Capital:

• Asset Management
• Mutual Funds
• Life Insurance
• Commercial Finance
• Stock Broking

Competitors of Reliance Capital Limited

The company has intense competition, some of its major competitors are as follows:

• Tata Capital
• Transamerica
• Midden Brabant Advies
• Aditya Birla Capital

SWOT Analysis of Reliance Capital Limited

SWOT analysis is a vital strategic planning tool that can be used by Reliance Industries managers to do a situational analysis of the organization. It is a useful technique to analyze the present Strengths (S), Weaknesses (W), Opportunities (O) & Threats (T).

1. Strengths of Reliance Capital Limited

As one of the leading organizations in its industry, Reliance Industries has numerous strengths that help it to thrive in the marketplace. 

• Free Cash Flows – The company has free cash flows that provide resources to expand into new projects and help in expansion.
• Strong Brand Portfolio – Over the years Reliance Industries has built a strong brand portfolio and the company has a great name due to its parent group.

• Strong Distribution Network – Over the years Reliance Industries has built a reliable distribution network that can reach the majority of its potential market.

2. Weaknesses of Reliance Capital Limited

Weaknesses are internal factors of the company which is the cause of loss to the company. Let’s look at some of the weaknesses of Reliance Capital.

• High Inventory – Reliance Capital has a high inventory which can hammer the long-term growth of the company.
• Lack of Planning – Financial planning is not done properly and efficiently. The current asset ratio of the company shows that it can plan the finance decision more efficiently.
• Limited Success – If we look at the success of Reliance Capital without taking into account its parent group, we can say it is still limited.
• Business Model – The structure of the company is compatible with only the present business model of the company.

3. Opportunities of Reliance Capital Limited

• Taxation Policy – The new taxation policy can significantly impact the way of doing business and can open new opportunities for established players such as Reliance Industries to increase its profitability.
• New Environmental Policies – The new environmental policies will bring new opportunities for the company, it can take advantage of them.
• Lower Cost of Transportation – Decreasing the cost of transportation because of lower shipping prices can also bring down the cost of Reliance Industries Its products thus providing an opportunity to the company.

4. Threats of Reliance Capital Limited

• Intense competition – Stable profitability has increased the number of players in the industry over the last two years which has put downward pressure on not only profitability but also on overall sales.
• Resignation of Top Management – The resignations of core people of the company is a red flag, leading to fluctuations in decision making.

Conclusion

Reliance Capital Limited is a traditional company doing alright at its level, the company has a strong parent group giving it a base for its brand image. It also has a strong network in the country and is providing efficient services but frequent resignations in the top management can lead to slow decisions, which will affect the growth of the company.

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