Reliance Nippon Life AMC to sell 10% stake via IPO

Reliance Nippon Life Asset Management (RNAM) has received approval from its board of directors for an initial public offer, subject to necessary regulatory and corporate approvals.

The proposed listing will be in FY18 and initially, the AMC will dilute merely 10 per cent. It could be the first initial public offer by a major asset management company (AMC) in India though smaller rival UTI MF has been planning an IPO for some time now.

"Initially we will be listing 10 per cent and as per the Sebi (Securities and Exchange Board of India) guidelines over the next 3 years which is 2021, we will be going up to 25 per cent," said Sundeep Sikka, ED and CEO, Reliance Nippon Life Asset Management.

Market experts peg the valuation of the company at Rs 20,000 crore, which is 5 per cent of its AUM.

"We would like to do it soon but at the outer limit it would be done by March this fiscal," Sikka told reporters after the board meeting.

The company will use the funds raised from the IPO to grow the business as well as look for inorganic opportunities, Sikka said. Nippon will also be participating in the IPO. 

"As a part of financial inclusion we have been creating wealth for mutual fund unit holders. Now we also believe it's an opportunity for retail investors to participate as equity shareholders in the AMC," he said.

"Along with further consolidations happening in economy we would like to be ready to take advantage of suitable acquisitions," he added.

Reliance Nippon Life Asset Management is a subsidiary of Reliance Capital with Nippon Life Insurance Company as its strategic partner. Reliance Capital holds 51 per cent stake in RNAM.

Sikka said discussions with merchant bankers, lawyers and auditors for IPO process will be initiated soon.

In October 2015, Reliance Nippon Life Asset Management, acquired global giant Goldman Sachs Mutual Fund business in India for Rs243 crore.

RNAM is among the largest asset manager in India managing assets of Rs3,58,059 crore, including MF assets under management (AUM) of Rs2,10,891 crore as of 31 March 2017.