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Reliance Nippon Life Asset Management IPO subscribed 7.5 times on second day

26 October, 2017

Reliance Nippon Life Asset Management Co Ltd’s initial public offering—the first by an Indian mutual fund manager—was covered 7.5 times on the second day on Thursday as the issue continued to see more demand across investor categories.

The offering of 42.84 million shares, excluding the anchor allotment, received bids for 319.26 million shares on day two, stock-exchange data showed.

The portion set aside for qualified institutional buyers (QIBs) was subscribed 9.8 times. The non-institutional investors’ category—comprising high net-worth individuals and corporate bodies—was subscribed 16.16 times. Retail investors, whose bid value cannot exceed Rs 2 lakh per application, bid 2.5 times the shares on offer, the data showed.

The IPO was covered nearly five times on the first day of the issue on Wednesday after receiving full subscription within five minutes of opening, with bids pouring in from domestic private banks, besides foreign portfolio investors.

Reliance Nippon Life, a joint venture between industrialist Anil Ambani-led Reliance Group and Japan’s Nippon Life, is seeking Rs 15,422.4 crore ($2.36 billion) in valuation through the IPO.

On Tuesday, India’s third-largest mutual fund manager raised Rs 462.67 crore ($71.08 million) by selling shares to a bunch of anchor investors ahead of its IPO. It allotted 18.36 million shares at the upper end of the Rs 247-252 price band, according to a stock-exchange filing.

The total IPO size is pegged at Rs 1,542.24 crore at the upper end of the price band. The issue will result in a 10% stake dilution on a post-issue basis.

The IPO comprises a fresh issue of 24.48 million shares and a sale of 36.72 million shares by promoter entities.

Nippon will sell 25.49 million shares, while Reliance Capital will offload the remaining. The IPO would bring parity to the holding of both partners at 42.88% each. Currently, Nippon holds a 49% stake.

Nippon had originally picked up a 26% stake in the Indian asset management firm for $290 million in 2012, valuing it at Rs 5,600 crore ($920 million) then. It bought 9% more in 2014 and an additional 14% the following year.

The promoters will get three years from the date of listing to meet the 25% minimum public shareholding norms by the capital markets regulator.

Reliance Nippon Life had filed its draft red herring prospectus on 18 August. It received regulatory approval for the IPO on 5 October. In July, VCCircle had first reported that the company hired merchant bankers to run the listing process.

JM Financial, Nomura, CITIC CLSA, and Axis Capital are the global coordinators and book running lead managers to the IPO. Edelweiss, IIFL, SBI Caps and Yes Securities are the other merchant bankers.

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Reliance Nippon Life Asset Management IPO subscribed 7.5 times on second day

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