Reliance Nippon Life Asset Management (RNAM) has got approval from its board to list the equity shares of the company, subject to necessary regulatory and corporate approvals.
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.
Discussions with merchant bankers, lawyers and auditors for IPO process would be initiated soon. The percentage of dilution, which shall be subject to regulatory norms, is yet to be decided. The proposed listing of RNAM would facilitate sharing of value with the retail investors applying for its IPO, the company said.
“We would like to do it soon but at the outer limit it would be done by March this fiscal,” Sundeep Sikka, executive director and CEO, Reliance Nippon Life Asset Management told reporters here following 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 asset management company. Along with further consolidations happening in economy we would like to be ready to take advantage of suitable acquisitions,” Sikka said.
Reliance MF is the third largest player in 42-member strong mutual fund industry. RNAM has assets under management (AUM) of Rs 3.6 lakh crore, including Rs 2.11 lakh crore for mutual fund.
Typically, asset management companies are valued at 5% of AUM, which is likely to value Reliance MF at about Rs 20,000 crore and a 10% stake sale could fetch Rs 2,000 crore, analyst and market sources said.
Published 07 June 2017, 20:05 IST