Reliance Nippon Life Asset Management IPO – Mutual Fund Review, Analysis, Details,Opening Date, Issue Price, Allotment Status, Listing

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Current Status

Reliance Nippon Life Asset Management IPO is over-subscribed 81.37 times –  Institutional investors – 118 times, HNI — 210 times, and Retail – 5.35 times

Reliance Asset management is third largest mutual fund company in India.

Issue Details of Reliance Mutual Fund IPO:   

  • IPO Open:  25th Oct – 27th Oct 2017
  • Issue Price band: Rs 247 – Rs 252
  • Issue Size:  Rs 1540 crore
  • Market lot:   59 shares
  • Minimum Investment:  14868 (Rs 252 per share)
  • Max Investment for Retail Investor – 767 shares
  • Book Running Lead Managers:   Axis Capital
  • Registrar: Karvy
  • Listing: BSE/NSE

IPO Issue Allocation:

  • Qualified institutional buyers (QIBs) – 75% of the offer.
  • Non-institutional bidders –  15% of the offer.
  • Retail individual bidders  – 10% of the offer.

Background:

Reliance Nippon Life Asset Management Limited (formerly Reliance Capital Asset Management Limited)(RNAM) is the asset manager of Reliance Mutual Fund (RMF).

  • Reliance Capital Limited is one of India leading and fastest growing, RBI registered Non-Banking Finance Company (NBFC). and has its business interests in Asset Management, Life Insurance, General Insurance, Private Equity, Proprietary Investments, Stock Broking, & other activities in the Financial Services Sector.
  • Nippon Life Insurance Company (NLI) is a Japan leading private life insurer and offers a wide range of financial products, including individual and group life and annuity policies through various distribution channels, mainly using face-to-face sales channels for its traditional insurance products.

Reliance Asset management is third largest mutual fund company in India after ICICI Pru & HDFC MF.

Top Shareholdings:

The list of the top shareholders of the company and the number of equity shares held by them is as below:

Objective of the issue:  

Out of the totla issue, 40% is fresh issue and 60% is OFS portion.,

– To achieve the benefits of listing the equity shares of the company on the stock exchanges
– Carry out the sale of 8,62,47,187 equity shares by the selling shareholders. The company will not receive any proceeds from the offer for sale.

Anchor Investors:  

 Financials:

 Valuation as compared to its peers:

At the upper price band (Rs 252) , the total market cap will be Rs 15422 crores which will mean the PE ratio of 37x (based on FY2017) and 34x (basedo n FY2018E). 

Brokerage Recommendations: 

Angel Broking Subscribe
   

Should you invest:   The company’s profitability is average as the equity fund business market share is low. Also, ADAG group shares has not performed well in the past.  So I will personally avoid this issue.

Despite above, this IPO is expected to generate some interest as this is first IPO for an AMC.

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