Reliance Nippon Life AMC is selling about 2.45 crore fresh shares in the IPO. (Image: Facebook)

Reliance Nippon Life Asset Management Ltd’s Rs 1,542 crore initial public offer (IPO) will open for subscription tomorrow October 25. The issue, with a price band of Rs 247-252 per equity share, will close on October 27. The offer by the manager of India’s third-biggest mutual fund by assets under management involves a 10 percent stake sale in the company.

IPO details:

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. The bids can be made for a minimum of 59 equity shares and in multiples of 59 shares thereafter. The trading will commence on October 25 and end on October 27. Reliance Nippon Life IPO will be the first IPO from Reliance Group after Reliance Power in 2008. Reliance Nippon Life has issued 2.45 crore fresh equity shares, while 3.68 crore shares are Offer for sale by its promoters Reliance Capital and Nippon Life Insurance Company.

IPO Proceeds:

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.

Brokerage Rating:

Leading broking firm Motilal Oswal is bullish on the IPO and recommend investors to subscribe for long-term investment. According to the broking firm, RNLAM is the largest AMC with highly diversified product offerings and strong distribution reach. Other key strengths of the company are the leadership positioning in AMC business with strong credentials to drive growth, strong distribution reach, diversified product mix with strong investment track record and strong ROE/ROCEs of 22%/ 25%, Motilal Oswal said in a report.

Company Profile:

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.

Anchor Investors:

Reliance Nippon Life 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. The anchor book subscription will open today October 24. 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.