Reliance
Nippon Life MF Looks to Raise Rs 1,524
cr Via IPO..!
ISSUE OPENS ON OCTOBER
25, 2107 and has a price band of Rs. 247
to Rs. 252 a share
Reliance Nippon Life
Asset Management, India's third largest mutual fund, will raise up to Rs. 1,524
crore through an initial public offer (IPO) later this month, valuing the firm
at Rs. 15,240 crore.
The issue the first
by a domestic mutual fund has been priced in the band of Rs. 247 to Rs. 252 per
share.
The mutual fund,
jointly owned by Mr. Anil Ambani's Reliance Capital and Nippon Life Insurance
Company, manages assets worth Rs. 3,80,000 crore. Of this, the average assets
under management under mutual funds is Rs. 2.31 lakh crore on September 2017,
while pension accounts make up the bulk of the rest.
At a value of Rs.
15,240 crore, the IPO will value the fund at 4% of the total assets of Rs.
3,80,000 crore. The issue will value the firm at 6.6% of the domestic mutual
fund business.
Money managers said
the company has a `first mover advantage' with its IPO as investors would want
to bet on the shift in household savings from physical assets to financial
assets.
“There is a
structural shift in the Indian household savings pattern.Household savings are
attracted to wards equity as an asset class, and mutual funds who help
channelise investor savings are one of the biggest beneficiaries,“ says Mr.
Alok Ranjan, headPMS, Way2Wealth.
Ranjan believes that
the valuation is justified given its good asset mix of debt and equity ,
widespread geo graphical presence, strong distribution network and is among the
top players in a high growth industry The firm's IPO, which opens on October
25, will issue 2.44 crore shares afresh and existing shareholders will sell
3.67 crore shares.The IPO closes on October 27, 2017
The Indian mutual
fund industry is at a nascent stage of growth with approximately 34% of the
population invested in mutual funds.
Demonetisation has
accelerated the shift from physical savings to financial savings and assets
under management of the industry grew sharply by 24% from Rs. 16.90 lakh crore
in October 2016 to Rs. 20.94 lakh crore by September 2017
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