Anil Ambani-led Reliance Capital to exit mutual fund business, offers stake to Nippon Life

By: | Updated: February 22, 2019 7:38 AM

Reliance Capital has invited its joint venture partner Nippon Life Insurance Co to make an offer to acquire its entire 42.88% stake in Reliance Nippon Life Asset Management.

Reliance Cap invites partner to acquire entire stake in MF bizReliance Cap invites partner to acquire entire stake in MF biz

Reliance Capital has invited its joint venture partner Nippon Life Insurance Co to make an offer to acquire its entire 42.88% stake in Reliance Nippon Life Asset Management.

On announcement of this development, the shares of Reliance Nippon Life Asset Management surged as much as 20% to close at `187.05 on BSE.

Reliance Capital and Nippon Life Insurance currently hold equal stake of 42.88% each in Reliance Nippon Life Asset Management and the remaining stake is held by the public shareholders. The data from Association of Mutual Funds in India (Amfi) shows that Reliance Mutual Fund has an average assets under management of `2.36 lakh crore as on October-December quarter.

Officials in the industry say that valuation of the deal is not known, and if transaction goes through, it will trigger an open offer from Nippon Life. If deal goes through than the fund house would be wholly owned mutual fund in India.

Reliance Nippon Life Asset Management was listed on stock exchanges in November 2017 and is down by around 25.8% against the issue price of `252. The market capitalisation of the Reliance Nippon Life Asset Management stands at `11,447.46 crore as on Thursday closing.

Reliance Nippon Life Asset Management is the asset manager of Reliance Mutual Fund (RMF) schemes. RNAM also has the mandates for fund management from Employees’ Provident Fund Organisation (EPFO), The Pension Fund Regulatory and Development Authority (PFRDA) [as a Sponsor of the Pension Fund Manager], Employees’ State Insurance Corporation (ESIC) and The Coal Mines Provident Fund Organisation (CMPFO).

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