Reliance Nippon Life climbs nearly 13% on trading debut after $238 mn IPO
Photo Credit: Manni Das/VCCircle

Reliance Nippon Life Asset Management Co. Ltd, India's third-largest mutual fund and the first in the segment to go public, made a strong start on the stock exchanges on Monday with its shares listing at a 16.7% premium to the issue price, before paring some gains at close.

Shares of Reliance Nippon Life began trading on the BSE at Rs 294 apiece compared with the initial public offering (IPO) price of Rs 252, stock-exchange data showed.

The stock touched an intraday high of Rs 298.70 and low of Rs 278 per share. Eventually, it closed at Rs 284 apiece, up 12.7%. The AMC now commands a market capitalisation of Rs 17,380.80 crore ($2.69 billion).

The BSE’s benchmark Sensex recouped the day’s losses to close 0.14% higher, scaling a new peak in early trade.

Reliance Nippon Life is the 28th company to list on the bourses this calendar year. Of the previous 27 firms, 15 have risen on listing day, stock-exchange data show.

Reliance Nippon Life raised Rs 1,542.24 crore ($238 million) via the IPO that was subscribed 81 times, joining companies such as Godrej Agrovet Ltd, Capacit’e Infraprojects Ltd, MAS Financial Ltd, Dixon Technologies and hypermarkets operator Avenue Supermart in attracting investors in droves.

The IPO of Capacit’e was covered a record 182 times, while Avenue Supermart’s share sale was subscribed 105 times. Contract electronics maker Dixon’s IPO was covered 117 times.

The joint venture between industrialist Anil Ambani-led Reliance Group and Japan’s Nippon Life had sought Rs 15,422 crore ($2.36 billion) in valuation through the IPO.

The issue resulted in a 10% stake dilution. The company issued fresh 24.48 million shares and promoter entities sold 36.72 million shares. Nippon Life sold 25.49 million shares while Reliance Capital sold the remaining. The IPO brought parity to the holding of both partners at 42.88% each. Nippon held a 49% stake prior to the IPO.

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

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.

Reliance Nippon Life had filed its draft red herring prospectus for the IPO on 18 August and received regulatory approval 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 were the global coordinators and book running lead managers to the IPO. Edelweiss, IIFL, SBI Caps and Yes Securities were the other merchant bankers.

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