Reliance Nippon Life Asset Management, India's third largest mutual fund, will raise up to Rs.1,524 crore through an 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.247-252 per share.
The mutual fund, jointly owned by 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.
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.
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.