Re­liance Nip­pon Life sets IPO price band at R 247-252

Financial Chronicle - - COMPANIES, MONEY & MARKETS -

RE­LIANCE Nip­pon Life As­set Man­age­ment's Rs 1,540 crore ini­tial public of­fer­ing, the first by a mu­tual fund house, will of­fer shares in the price band of Rs 247 to Rs 252. The is­sue will open on Oc­to­ber 25 and close on Oc­to­ber 27.

The IPO of up to 6.12 crore eq­uity shares of Rs 10 face value con­sists of a fresh is­sue of over 2.44 crore shares and an of­fer for sale of over 3.67 crore shares by Re­liance Cap­i­tal and Nip­pon Life In­sur­ance Com­pany, the pro­moter sell­ing share­hold­ers.

The of­fer con­sti­tutes of 10 per cent of the post-of­fer paid-up eq­uity share cap­i­tal of the com­pany.

For­merly known as Re­liance Cap­i­tal As­set Man­age­ment, the com­pany started its mu­tual fund op­er­a­tions in 1995 as the as­set man­ager for Re­liance Mu­tual Fund. The com­pany man­ages as­sets worth Rs 2,22,964 crore and has 7.01 mil­lion in­vestor fo­lios as of June 30, 2017. The com­pany man­ages 55 open-ended mu­tual fund schemes, in­clud­ing 16 ETFs and 174 close-ended schemes for Re­liance Mu­tual Fund, as of June 30.

The fund has a pan-In­dia net­work of 171 branches and about 58,000 dis­trib­u­tors, in­clud­ing banks, fi­nan­cial in­sti­tu­tions, na­tional dis­trib­u­tors and in­de­pen­dent fi­nan­cial ad­vi­sors (IFAs), as of June 30.

The com­pany pro­poses to utilise the net pro­ceeds of the fresh is­sue for set­ting up new branches and re­lo­cat­ing cer­tain ex­ist­ing branches, up­grad­ing the IT sys­tem, lend­ing to their sub­sidiary Re­liance Al­ter­na­tive In­vest­ment Fund, fund­ing in­or­ganic growth and gen­eral cor­po­rate pur­poses.

Sundeep Sikka, ex­ec­u­tive di­rec­tor and CEO, Re­liance Nip­pon Life As­set Man­age­ment, speak­ing at the launch of the IPO, said, “The branch net­work will be raised from ex­ist­ing 171 branches to 500 branches as there is a seg­ment in the coun­try who needs phys­i­cal guid­ance as well as touch and feel.”

Sikka said, “Cur­rently only 3 per cent of the Indian pop­u­la­tion is in­vest­ing in mu­tual funds; the op­por­tu­nity is hu­mon­gous. We be­lieve we have built a fran­chisee which will be able to tap In­dia’s growth story.”

From the to­tal of­fer size, bid­ders from the qual­i­fied in­sti­tu­tional buy­ers (QIB) cat­e­gory will be al­lo­cated 50 per cent of the to­tal shares on of­fer and 35 per cent to re­tail in­di­vid­ual in­vestors. The re­main­ing 15 per cent will be al­lot­ted to non-in­sti­tu­tional or high net worth bid­ders.

Up to 60 per cent of the QIB por­tion will be avail­able for al­lo­ca­tion to the an­chor in­vestors. The an­chor in­vestor bid­ding will be on Oc­to­ber 24, one work­ing day prior to the public of­fer open­ing date.

JM Fi­nan­cial In­sti­tu­tional Se­cu­ri­ties, CLSA In­dia, No­mura Fi­nan­cial Ad­vi­sory and Se­cu­ri­ties, Axis Cap­i­tal, Edel­weiss Fi­nan­cial Ser­vices, IIFL Hold­ings, SBI Cap­i­tal Mar­kets and Yes Se­cu­ri­ties are the book run­ning lead man­agers to the public of­fer.

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