The Reliance Nippon Life Asset Management has expected to raise about Rs 1,542 crore through the public offer. (Image: Reuters)
The IPO (initial public offering) of Reliance Nippon Life Asset Management Ltd which opened for subscription on Wednesday was fully subscribed within minutes of opening. The public offer of Anil Ambani group’s asset management company was lapped up by QIBs (qualified institutional buyers) and NIIs (non-institutional investors) which led to the such a high subscription in such a short time. The total subscription of the IPO stood at 2.44 times as at 11:00 am. The IPO will remain open for three days starting today till 27 October 2017.
The portion reserved for QIBs was subscribed 2.63 times; the quantum allocated for NIIs got subscribed 7.27 times while the shares reserved for retail investors was subscribed 26%. There was a contrary pattern seen on BSE and NSE, with QIB subscribing to over 2.5 times on NSE only while NII lapped up over 7 times that only on BSE.
The Reliance Nippon Life Asset Management has expected to raise about Rs 1,542 crore through the public offer. The company has set a price band of Rs 247-252 per equity share. The bids can be made for a minimum of 59 equity shares and in multiples of 59 shares thereafter. The offer by the manager of India’s third-biggest mutual fund by assets under management involves a 10% stake sale in the company.
Reliance Nippon Life IPO will be the first public offer from Reliance Group after Reliance Power in 2008. Reliance Nippon Life will issue 2.45 crore fresh equity shares, 3.68 crore shares through offer for sale by its promoters — Reliance Capital and Nippon Life Insurance Company. Edelweiss Financial Services, IIFL Holdings, SBI Capital Markets and Yes Securities (India) are the book running lead managers, while Karvy Computershare is the registrar to the issue.
Reliance Nippon Life is planning to use a portion of the IPO proceeds to fund inorganic growth. “The proceeds of the proposed IPO will be used partly to fund the inorganic expansion of its business,” Saugata Chatterjee, head (sales and distribution) of Reliance Nippon Life AMC said. The balance amount would be expended on the expansion of its branch network to all the districts of the country and for penetration into the digital space and on technology.
Reliance Nippon Life Insurance Company is a leading private sector life insurance company in India promoted by Anil Dhirubhai Ambani Group-led Reliance Capital. As on March 31, 2017, the net worth of the company stood at Rs 16,548 crore, while its total assets as on the date stood at Rs 82,209 crore. Reliance Nippon Life’s asset under management is around Rs 3,59,000 crore, including Rs 2.23 lakh crore for mutual funds.
