reliance nippon life ipoReliance Nippon Life IPO

Reliance Nippon Life Asset Management  is coming up with its IPO (Initial Public Offering) of 1542.24 Crore on October 25. It is 2nd most profitable asset management company of India. Reliance Nippon Life asset management company has been incorporated in the year 1995. The location of headquarters of the company is in Mumbai.

There is joint ownership of Reliance Capital and Japan’s Nippon life insurance in the company. Relaince Nippon Life IPO consists of fresh issue of 2.40 crore shares.

Apart from this, there is offer for sale of 1.12 crore shares by Reliance capital and 2.55 crore shares by Nippon Life Insurance Company. Reliance Capital is a non banking financial corporation(NBFC) registered with Reserve Bank of India.

The business is spread over in various areas including asset management and mutual funds, life, health and general insurance, stock broking, wealth management services, provides commercial & home finance, asset reconstruction and proprietor investments.

The other owner, Nippon Life Insurance Company is one of the leading private life insurer in Japan. It offers wide range of products including individual as well as group life annuity policies.

Company Business

Reliance Nippon Life Asset Management company manages 55 open end mutual fund schemes which includes 16 ETFs and 174 close ended schemes.

It has 171 branches from where it operates its business. It has network of 58,000 distributors that includes banks, financial institutions, independent financial advisors.

In addition to this, company is also involved in managing the offshore funds which it does through its subsidiaries located in Singapore and Mauritius.

Company Promoters

The promoter of the company are Reliance Capital and Nippon Life Insurance Company.

Objectives of Issue

The company is coming up with IPO for the following reasons –

  • To upgrade the IT system
  • To set up new branches and to relocate the existing ones.
  • For advertising, marketing and brand building activities.
  • To fund inorganic growth and other strategic initiatives.
  • To meet expenses towards general corporate purpose.
  • Lending to our Subsidiary (Reliance AIF) for investment as continuing interest in the new AIF schemes managed by Reliance AIF
  • Investing towards our continuing interest in new mutual fund schemes managed by us

Reliance Nippon Life Asset Management Company Financials

This is the summary of Reliance Nippon life asset management financial information of the last 5 years in consolidated form:

Summary of financial Information (Consolidated)
Particulars For the year/period ended (in Rs. million)
31-Mar-17 31-Mar-16 31-Mar-15 31-Mar-14 31-Mar-13
Total Assets 20,198.10 18,857.91 16,629.97 16,812.08 15,087.00
Total Revenue 14,004.38 12,710.70 9,301.15 7,840.26 7,126.74
Profit After Tax (PAT) 4,055.70 3,901.24 3,495.94 3,023.01 3,023.01

Valuation of Reliance Nippon Life Asset Management Company

  • Earnings Per Share (EPS): Rs, 6.85
  • Price/Earnings (P/E) ratio: 36.05 – 36.78
  • Return on Net Worth (RONW): 21%
  • Net Asset Value (NAV): Rs. 31.71 per share

Reliance Nippon Life IPO Issue Details

  • IPO Open Date – 25 Oct 2017 – 17 Oct 2017
  • Issue Size – 61,200,000 Equity Shares of Rs 10 amounting to Rs 1542.24 Cr
    Fresh Issue of 24,480,000 Equity Shares of Rs 10
    Offer for Sale of 36,720,000 Equity Shares of Rs 10
  • Face Value – Rs 10 per share
  • Issue Price – Rs 247 – Rs 252 per equity share
  • Lot size – 59 shares
  • Minimum order quantity – 59 shares
  • Listing Stock exchanges – NSE and BSE