Reliance Nippon AMC IPO subscribed 81 times

The country’s first ever mutual fund initial public offering (IPO) by Reliance Nippon Asset Management Company (AMC) was lapped up by investors. The 43-million share offering saw 81 times more demand, with bids for 3,485 million shares, worth ~87,830 crore. The ~1,540-crore offering saw healthy demand in all three investor categories. The institutional portion of the IPO was subscribed 118 times, high net worth individual (HNI) segment was subscribed 209 times and retail investor portion was subscribed five times. The retail book was kept open till late as demand remained high, said investment bankers. The IPO saw over 1.5 million applications, one of the highest for IPOs this year.

The price band for the IPO was ~247 -252 per share. At the top end of the price band, Reliance Nippon AMC was valued at ~15,422 crore. Japan’s Nippon Life and Anil Ambaniled Reliance Capital sold shares worth up to ~643 crore and ~282 crore, respectively, in the IPO. The AMC also issued fresh shares worth ~617 crore.

The company is the country’s third-largest AMC in terms of assets and has a 11.4 per cent market share. At the end of August, Reliance Nippon AMC managed assets worth ~3.84 lakh crore across mutual funds (~2.3 lakh crore), managed accounts (~1.53 lakh crore) and offshore funds & advisory mandates (~2,223 crore). At ~252 per share, Reliance Nippon AMC was valued at 37 times its FY17 earnings and eight times its FY17 pre-IPO book value.

“Considering Reliance Nippon AMC is the third largest AMC coupled with huge potential of MF industry to grow, strong return ratios, asset light business, higher dividend payout ratio and track record of superior investment performance, we are positive on this IPO,” Angel Broking had said in a note to its clients.

“We like Reliance Nippon AMC as it is the largest AMC with highly diversified product offerings and strong distribution reach,” said another note by Motilal Oswal.