Reliance Nippon Life AMC plans IPO, to dilute 10% stake initially

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

The proposed listing will be in FY18 and initially, the AMC will dilute merely 10 percent.

"Initially we will be listing 10 percent 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 percent," said Sundeep Sikka, ED and CEO, Reliance Nippon Life Asset Management  details on valuations.

Market experts peg the valuation at Rs 20,000 crore, which is 5 percent of AUM.

It could be the first initial public offering by a major asset management company (AMC) in India though smaller rival UTI MF's IPO plans have been in the works for a long time.

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 was addressing at a press conference held in Mumbai to announce the board approval for the AMC IPO.

On the rationale behind listing, Sikka said,"We are getting ready for consolidation in the industry. We believe the IPO will help us both for organic and inorganic opportunity which will come in near future."

Sikka also 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 Rs 243 crore.

RNAM will be the first among top 3 players in the AMC industry for listing.

The proposed listing of RNAM will facilitate sharing of value with the retail investors who will apply for IPO.

RNAM is among the largest asset manager in India managing assets of Rs 3,58,059 crore including MF assets under management (AUM) of Rs 2,10,891 crore as of March 31, 2017.

UTI MF's public issue will allow a partial exit to four of its investors -— State Bank of India, Life Insurance Corporation, Bank of Baroda and Punjab National Bank.