Re­liance Nip­pon Life IPO to open on 25 Oct


Re­liance Nip­pon Life As­set Man­age­ment Ltd, In­dia’s third-largest mu­tual fund man­ager, on Thurs­day said that it will launch its Rs1,542 crore ini­tial pub­lic of­fer­ing (IPO) on 25 Oc­to­ber.

It will be the first IPO by an In­dian mu­tual fund man­ager.

The as­set man­age­ment com­pany has set a price range of Rs247-252 per share for the IPO, which val­ues it at Rs15,116-15,422 crore.

The of­fer will close on 27 Oc­to­ber.

Re­liance Nip­pon Life As­set Man­age­ment is jointly pro­moted by Re­liance Cap­i­tal Ltd, a part of Anil Am­bani-led Re­liance Group which cur­rently holds 46.57%, and Nip­pon Life In­sur­ance Co., a lead­ing pri­vate life in­surer in Ja­pan, which holds 49%.

Re­liance Nip­pon Life As­set Man­age­ment is in­volved in man­ag­ing mu­tual funds (in­clud­ing ex­change-traded funds), man­aged ac­counts which in­clude port­fo­lio man­age­ment ser­vices, al­ter­na­tive in­vest­ment funds, pen­sion funds, and off­shore funds.

As of 31 March, it had as­sets un­der man­age­ment of Rs2.11 tril­lion.

In 2016-17, the com­pany re­ported a rev­enue of Rs1,400.4 crore, up 10% from the pre­vi­ous fis­cal.

The com­pany re­ported a profit of Rs405.5 crore in 2016-17, up 4% from a year ago.

The IPO will see a to­tal stake di­lu­tion of 10%. The pub­lic of­fer­ing in­cludes a fresh is­sue of Rs617 crore.

The pro­ceeds from the fresh is­sue will be used for set­ting up new branches and re­lo­cat­ing ex­ist­ing branches, up­grad­ing the in­for­ma­tion tech­nol­ogy sys­tem, ad­ver­tis­ing, lend­ing to its sub­sidiary Re­liance AIF, in­vest­ing in new mu­tual fund schemes man­aged by the com­pany and fund­ing in­or­ganic growth.

Pro­mot­ers Re­liance Cap­i­tal and Nip­pon Life will col­lec­tively sell 36.72 mil­lion shares, which at the up­per end of the price band will fetch Rs925 crore.

Re­liance Cap­i­tal will sell shares worth Rs283 crore, while Nip­pon Life will off­load shares worth Rs642 crore.

Re­liance Nip­pon Life As­set Man­age­ment also plans to grow in­or­gan­i­cally. In 2015, the as­set man­ager ac­quired the mu­tual fund busi­ness of Gold­man Sachs Group Inc. in In­dia for Rs243 crore (about $37.5 mil­lion) in an all-cash deal.

“There are 41 as­set man­age­ment com­pa­nies; the ma­jor­ity of the mar­ket is dom­i­nated by top ten com­pa­nies, ac­count­ing for 80% of the in­dus­try’s as­sets un­der man­age­ment. We will look for in­or­ganic growth in the fu­ture; sim­i­lar to what we have done with Gold­man Sachs In­dia in the past,” said Sun­deep Sikka, chief ex­ec­u­tive of­fi­cer, Re­liance Nip­pon Life As­set Man­age­ment.

The In­dian mu­tual fund in­dus­try has wit­nessed a strong in­flow of funds in the last cou­ple of years.

The mu­tual fund in­dus­try’s to­tal as­sets un­der man­age­ment stood at Rs20.4 tril­lion at the end of Septem­ber, an in­crease of 29% from the same month a year ear­lier, data from the As­so­ci­a­tion of Mu­tual Funds of In­dia shows.

Re­liance Group com­pa­nies have sued HT Me­dia Ltd, Mint’s pub­lisher, and nine oth­ers in the Bom­bay high court over a 2 Oc­to­ber 2014 front-page story that they have dis­puted. HT Me­dia is con­test­ing the case.

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