I hold Reliance Capital because it seems to be the best way to take exposure to future growth in retail finance & insurance. My other option was Indiabulls Finance - but generally brokerages don't cover Indiabulls (because Indiabulls is their competitor). Reliance Capital is a well researched stock in comparison - suits my style of investing. For investors with higher risk taking capacity, Indiabulls Fin probably makes better sense.

 

While there might be a 30% CAGR growth in stock price, it might not be the case with EPS growth. The insurance holding is a bit complicated - Edel Cap says Reliance Capital owns 100% 'economic interest' in insurance arm but hold only 25% directly. The rest is held by an 'associate company' of Reliance Capital. 

 

The increase in stock price will be because of increasing valuation of insurance and retail broking/finance businesses.

 

MF arm valuation is fairly easy. Mutual Fund houses are generally valued at 7% of AUM. The exact percentage depends on the mix of equity MFs and debt MFs.