The initial public offering (IPO) of asset management company Reliance Nippon Life Asset Management was launched today, and it was fully subscribed within minutes after opening. The company has planned to raise about Rs.1,542 crore from the offering. This marks the first ever IPO by an asset management company in India. This offering will bring down the overall promoter stake in the company by about 10%.
The IPO, which has already been oversubscribed by two times, will be open for three days till October 27 (Friday). Price band for this IPO has been set at Rs.247 to Rs.252 per share. For this IPO, the company’s primary stakeholders Reliance Capital and Nippon Life Insurance are offering their equity shares in the company.
Reliance Capital currently holds about 46.57% stake in the company and is offering 1.12 crore equity shares for this offer. Nippon Life Insurance currently holds about 49% stake in the company and is offering 2.55 crore equity shares for this offer. After this offering, the stake of both promoters in Reliance Nippon will come down to 42.88% each.
The shares listed for the offering will be sold to institutional investors, non-institutional investors, and retail investors. Following the offering, equity shares of Reliance Nippon will be listed in both National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
The company will use the proceeds from the IPO to improve its overall business operations in the industry. Investment will also be made in business activities like setting up new branches, advertising, marketing, brand building, etc. As of now, Reliance Nippon is the third largest mutual fund company in the country.
Reliance Nippon is a part of Anil Ambani-led Reliance Group and provides asset management service for Reliance Mutual Fund. The company currently manages assets exceeding Rs.3.5 lakh crore in value and holds about 11.5% market share in the country.