Anil Ambani’s public offer: Reliance Nippon OFS for retail investors today as RCap seeks to exit MF

Reliance Nippon Life Asset Management OFS (offer for sale) opens for retail investors today. The OFS is being done as a part of a larger plan, as Anil Ambani-led Reliance Capital (Rcap) looks to raise up to Rs 6,000 crore by divesting its stake from the mutual fund business entirely. The proceeds of the share sale will be used to pare debt, Reliance Capital had said in a statement on the exchanges. Earlier last week, the OFS saw robust demand, and was subscribed 1.6 times the reserved portion for institutional investors. The 5.29 crore share sale saw bids for 825 crore shares from institutions investors, data provide by stock exchanges showed. Today, about 5.30 crore shares will be on offer.

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The ongoing OFS is part of an agreement between Reliance Capital and Japan’s Nippon Life, under which the Anil Ambani-led firm will sell its entire shareholding in Reliance MF, and exit the mutual fund business. According to the firm’s statement, retail investors will have the option to place a price bid, or bid at the cut-off price, means tje lowest price at which the sale shares are sold. This will be determined by based on all valid bids received on the T day, said the firm. Reliance Nippon shares are currently trading at Rs 223, down by more than 1.75% on BSE. 

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Notably, as a part of the transaction, Japan-based Nippon Life has also made an open offer to the public shareholders of RNAM at Rs 230 per share, as required under Sebi regulations to reach the maximum permissible promoter shareholding of 75% for listed companies. After the open offer, the firm will buy  the remaining from Reliance Capital, as part of an agreement inked between the two joint venture partners on Thursday. Reliance Capital held about 42.88% stake in Reliance Nippon Asset management, prior to the announcement of exiting the business entirely. Reliance Capital is looking to raise up to Rs 6,000 crore from the deal by divesting its entire stake in Reliance MF, and the proceeds will be used to cut debt.