Reliance Nippon AM IPO subscribed 7.45 times on second day

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Mumbai | Published: October 27, 2017 3:06:43 AM

The initial public offer (IPO) of Reliance Nippon Life Asset Management was subscribed by 7.45 times on Thursday, the second day of the offer, with investors bidding for 31.92 crore shares against 4.28 crore shares on offer.

Reliance Nippon Life is aiming to raise around Rs 1,542 crore from its IPO. (Reuters)

The initial public offer (IPO) of Reliance Nippon Life Asset Management was subscribed by 7.45 times on Thursday, the second day of the offer, with investors bidding for 31.92 crore shares against 4.28 crore shares on offer. Qualified institutional buyers (QIBs) bid for 11.99 crore shares against 1.22 crore shares on offer. High net worth individuals (HNIs) bid for 14.83 crore shares against 91.80 lakh on offer. Retail investors bid for 5.09 crore shares against the 2.14 crore reserved for them. Reliance Nippon Life on Tuesday raised Rs 462.67 crore from 24 anchor investors ahead of its IPO. It allotted 1.83 crore shares at a price of Rs 252 per piece. Investors acquiring shares in the anchor allotment include Fidelity International, Morgan Stanley, HDFC Mutual Fund, SBI Mutual Fund, ICICI Prudential Life and Bajaj Allianz.

Reliance Nippon Life is aiming to raise around Rs 1,542 crore from its IPO. The company has set a price band of Rs 247-252 per share for its IPO and when calculated at the upper band of the issue price, the company will be valued at around Rs 15,422 crore. Reliance Nippon Life is one of the largest asset management company in India and the second most profitable fund house. The asset management company is a joint venture between Reliance Capital and Nippon Life. Currently, Reliance Capital holds 46.57% while Nippon Life has 49% stake in the company. Post-IPO holdings of both the companies will be 42.88% each, 10% of the public and the remaining with other shareholders. The issue opened on October 25 and will close on October 27.

The anchor investor bidding was on October 24. Bids can be made for a minimum of 59 shares and multiples of 59 thereafter. The offer comprises of a fresh issue of 2.44 crore shares and an offer for sale 3.67 crore shares. The offer sale comprises 2.54 crore shares from Nippon Life and 1.12 crore shares from Reliance Capital.The net proceeds of the fresh issue will be used to set up new branches and relocating certain existing branches, upgrading the IT system, advertising activities, lending to its subsidiary, and funding inorganic growth, among other things. The company will not receive any money from the offer for sale.

The company has total assets under management (AUM) of Rs 3.62 lakh crore. The company is involved in managing mutual funds including ETFs; managed accounts, including portfolio management services, alternative investment funds ( AIFs) and pension funds. In FY 17, the company had revenues of Rs 1,435 crore and posted a profit after tax of Rs 402 crore. According to its red herring prospectus (RHP), the company grew at a compounded annual growth rate (CAGR) of 15%. In 2017, 28 companies raised Rs 44,342 crore through IPO. Listing gains and returns by newly-listed companies, as also the positive sentiment in the broader market, are among the reasons attributed to the trend. SBI Life, ICICI Lombard, GIC Re,
BSE, HUDCO, CDSL, and Avenue Supermarts are some of the companies that completed their IPOs in the last nine months.

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