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Reliance Nippon Life IPO opens tomorrow: 10 things to know

Reliance Nippon Life Asset Management expects to raise Rs 1,542 crore through the IPO, with the company fixing a price band of Rs 247-252 per share. The IPO will open for subscription from October 25 to October 27.

BT Online        Last Updated: October 24, 2017  | 14:24 IST
Reliance Nippon Life IPO opens tomorrow: 10 things to know

Anil Ambani's Reliance Group firm Reliance Nippon Life opens its initial public offer (IPO) for subscription on Wednesday. Reliance Nippon Life's IPO will 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.

We look at ten things to know about the IPO.

 

  • The public issue comprises fresh issuance of 2.45 crore shares, besides an offer for sale of 1.12 crore shares by Reliance Capital and 2.55 crore shares by Nippon Life Insurance Company, as per the draft papers filed with the regulator.
  • The IPO size would be around 10 per cent of the post issue paid-up capital of the company. Jointly owned by Japan's Nippon Life and Reliance Capital, the firm is the asset manager to Reliance Mutual Fund. JM Financial, CLSA, Nomura and Axis Capital are the global coordinators and book running lead managers for the initial share sale.
  • Reliance Nippon Life Asset Management expects to raise Rs 1,542 crore through the IPO, with the company fixing a price band of Rs 247-252 per share. The IPO will open for subscription from October 25 to October 27.
  • Jointly owned by Japan's Nippon Life and Reliance Capital, the firm is the asset manager to Reliance Mutual Fund.
  • The firm is expected to see a huge demand of over Rs 15,000 crore from anchor investors against the earmarked book size of Rs 462 crore for them under its forthcoming IPO, merchant banking sources said. It will be the first initial public offer (IPO) from the Reliance Group after Reliance Power in 2008. An anchor investor refers to a qualified institutional buyer who buys stocks a day before the opening of an IPO of the company. This boosts the confidence of retail investors and improves price discovery of the stock. 
  • The anchor book subscription will be open today. Further, more than 50 global anchor investors have already applied for anchor allocation portion from the US, Japan, Singapore and India. These include sovereign wealth funds, mutual fund houses and private insurance companies. Abu Dhabi Investment Authority, Morgan Stanley, Fidelity International, DE Shaw, Morgan Stanley, HDFC Mutual Fund (MF) SBI MF, DSP BlackRock MF, UTI MF, ICICI Prudential Life Insurance Company and Bajaj Allianz are among the anchor investors that approached the firm for anchor portion.
  • The firm's revenue from operations - management fees for the three months ended June 30, 2017 and the financial years ended March 31, 2017, March 31, 2016, and March 31, 2015 was  Rs  3,64.39 million,  Rs 13,07.49 crore,  Rs 12,00.08 crore and  Rs 8,47.23 crore, respectively, representing 92.3%, 91.1%, 91.3% and 88.7% of our total revenue, respectively.
  • As of June 2017, there were 41 active AMCs actively operating in the current market comprising seven entities sponsored by public sector banks, two entities sponsored by financial institutions, 25 AMCs sponsored by the private sector and other financial companies and seven entities sponsored by foreign players (including joint ventures).
  • Reliance Nippon Life Asset Management is the third-largest asset management company in India, in terms of mutual fund quarterly average asset under management (QAAUM), as of June 30, 2017, according to ICRA.
  • As of June 30, 2017, the firm managed assets for 7.01 million investor folios, which comprised 6.72 million retail folios. For the quarter ended June 30, 2017,  the firm logged profit after tax (standalone) of Rs 83.4 crore.

 

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