Reliance Nippon Life Asset Management Ltd’s Rs 1,542 crore initial public offer (IPO) will open for subscription on October 25. The issue, with a price band of Rs 247-252 per equity share, will close on October 27. The offer by the manager of India’s third-biggest mutual fund by assets under management involves a 10 percent stake sale in the company.
The Anil Ambani-led Reliance Group firm’s IPO would be the first by an asset management company (AMC) in India though smaller rival UTI Mutual Fund’s offer plans have also been in the works for a long time. Reliance Nippon got board of directors’ nod in June. The company plans to sell more shares over the next four years. Company’s CEO Sundeep Sikka had said the company initially aims to dilute 10% stake and further 15% as per the SEBI norms. This will be the first IPO from Reliance Group after Reliance Power in 2008.
The Securities and Exchange Board of India (Sebi) issued its observations on the proposed IPO of Reliance Nippon on October 5, as per the latest update available on the regulator’s website.
Reliance Nippon’s two main shareholders, Nippon Life and billionaire Anil Ambani’s Reliance Capital, will sell up to 2,550 crore and 1,120 crore shares respectively, Reuters reported. JM Financial, Citic CLSA, Nomura and Axis Capital are the main banks managing the IPO while Edelweiss, IIFL Holdings, SBI Capital Markets and Yes Securities as book-runners. Jointly owned by Japan’s Nippon Life and Reliance Capital, the firm is the asset manager to Reliance Mutual Fund.
Reliance Nippon’s asset under management is around Rs 3,59,000 crore, including Rs 2.23 lakh crore for mutual funds. “The idea is to be in a state of readiness for both growth opportunities that lie ahead and even more (for) the consolidation that will happen,” chief executive Sundeep Sikka had said in a press conference in June. “The proceeds will be used for both organic and inorganic opportunities and growth for this company,” he had added.