Article

Reliance Nippon Life Asset Management- Information Note

23 Oct 2017 Nikita Bhoota

This document summarizes a few key points related to the issue and should not be treated as a comprehensive summary. Investors are requested to refer the Red Herring Prospectus for further details regarding the issue, the issuer company and the risk factors before taking any investment decision.

Please note that investment in securities is subject to risks including loss of principal amount and past performance is not indicative of future performance. Nothing herein constitutes an offer of securities for sale in any jurisdiction where it is unlawful to do so.

This document is not intended to be an advertisement and does not constitute an invitation or form any part of any issue for sale or solicitation of an offer to subscribe for or purchase any securities and neither this document nor anything contained herein shall form the basis for any contract or commitment whatsoever.

Issue Opens: October 25, 2017

Issue Closes: October 27, 2017

Face Value: Rs 10

Price Band: Rs 247-252

Issue Size: Rs 1,542 cr (612 lakh shares)

Public Issue: 12.47 cr shares (at upper price band)

Bid Lot: 59 Equity shares

Issue Type: 100% Book Building

% shareholding Pre IPO
Promoter 96.0
Public 4.0

Source: RHP

Company Background

Reliance Nippon Life Asset Management (RNLAM) is one of the largest asset management companies (AMC) in India, managing total AUM of Rs 3.6 lakh crore as of June 30, 2017. The Company is involved in managing mutual funds (MF, including ETFs); managed accounts, including portfolio management services, alternative investment funds (AIFs) and pension funds; and offshore funds and advisory mandates. According to ICRA RNLAM (is/was/has) -

  • Ranked the third largest AMC, in terms of MF quarterly average AUM (QAAUM) with a market share of 11.4%, as of June 30, 2017.

  • Ranked the second most profitable AMC in India in FY16.

  • Highest total MF monthly average AUM (MAAUM) among all AMCs in India in beyond top 15 (B-15) locations as of June 30, 2017.

  • Second highest retail MAAUM in India as of June 30, 2017.

  • 18.6 Lakh SIP accounts with monthly inflows of ~Rs 510 Cr (June 30, 2017).

Objects of the Issue

The offer consists of fresh issue of up to 244.8 lakh shares aggregating up to 605/617Cr at lower/upper end of the price band and Offer for Sale of up to 367.2 lakh shares by selling shareholders Nippon Life Insurance Company and Reliance Capital Limited.

Key Points

1.RNLAM has strong presence across India, has set up subsidiaries in Singapore and Mauritius and a representative office in Dubai. In India, the company has a pan-India network of 171 branches, of which 132 branches are located in B-15 locations and approximately 58,000 distributors as of June 30, 2017. Its distributors comprise IFAs, foreign banks, Indian private and public sector banks, broking companies, national distributors and digital platforms.

2.RNLAM is the third largest AMC in India, in terms of MF QAAUM, as of June 30, 2017, according to ICRA report. It has strong relationships with distributors and investors, consisting of individual (retail and HNIs) and institutional investors. Report further states, RNLAM has a diversified investor base wherein it manages asset for 70.1 lakh investor folios, which comprised 67.2 lakh retail folios. The MAAUM of retail investors managed by it was the 2nd largest (with a total market share of 13.6%) among asset management companies in India, according to ICRA. Furthermore, its branches are spread across 145 districts in India.

Key Risk

Macroeconomic conditions in India are likely to affect the performance of funds managed by the company, which may in-turn affect AUM managed by it, its management fees and revenue.

Research Disclaimer

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Reliance Nippon Life Asset Management- Information Note

23 Oct 2017 Nikita Bhoota

This document summarizes a few key points related to the issue and should not be treated as a comprehensive summary. Investors are requested to refer the Red Herring Prospectus for further details regarding the issue, the issuer company and the risk factors before taking any investment decision.

Please note that investment in securities is subject to risks including loss of principal amount and past performance is not indicative of future performance. Nothing herein constitutes an offer of securities for sale in any jurisdiction where it is unlawful to do so.

This document is not intended to be an advertisement and does not constitute an invitation or form any part of any issue for sale or solicitation of an offer to subscribe for or purchase any securities and neither this document nor anything contained herein shall form the basis for any contract or commitment whatsoever.

Issue Opens: October 25, 2017

Issue Closes: October 27, 2017

Face Value: Rs 10

Price Band: Rs 247-252

Issue Size: Rs 1,542 cr (612 lakh shares)

Public Issue: 12.47 cr shares (at upper price band)

Bid Lot: 59 Equity shares

Issue Type: 100% Book Building

% shareholding Pre IPO
Promoter 96.0
Public 4.0

Source: RHP

Company Background

Reliance Nippon Life Asset Management (RNLAM) is one of the largest asset management companies (AMC) in India, managing total AUM of Rs 3.6 lakh crore as of June 30, 2017. The Company is involved in managing mutual funds (MF, including ETFs); managed accounts, including portfolio management services, alternative investment funds (AIFs) and pension funds; and offshore funds and advisory mandates. According to ICRA RNLAM (is/was/has) -

  • Ranked the third largest AMC, in terms of MF quarterly average AUM (QAAUM) with a market share of 11.4%, as of June 30, 2017.

  • Ranked the second most profitable AMC in India in FY16.

  • Highest total MF monthly average AUM (MAAUM) among all AMCs in India in beyond top 15 (B-15) locations as of June 30, 2017.

  • Second highest retail MAAUM in India as of June 30, 2017.

  • 18.6 Lakh SIP accounts with monthly inflows of ~Rs 510 Cr (June 30, 2017).

Objects of the Issue

The offer consists of fresh issue of up to 244.8 lakh shares aggregating up to 605/617Cr at lower/upper end of the price band and Offer for Sale of up to 367.2 lakh shares by selling shareholders Nippon Life Insurance Company and Reliance Capital Limited.

Key Points

1.RNLAM has strong presence across India, has set up subsidiaries in Singapore and Mauritius and a representative office in Dubai. In India, the company has a pan-India network of 171 branches, of which 132 branches are located in B-15 locations and approximately 58,000 distributors as of June 30, 2017. Its distributors comprise IFAs, foreign banks, Indian private and public sector banks, broking companies, national distributors and digital platforms.

2.RNLAM is the third largest AMC in India, in terms of MF QAAUM, as of June 30, 2017, according to ICRA report. It has strong relationships with distributors and investors, consisting of individual (retail and HNIs) and institutional investors. Report further states, RNLAM has a diversified investor base wherein it manages asset for 70.1 lakh investor folios, which comprised 67.2 lakh retail folios. The MAAUM of retail investors managed by it was the 2nd largest (with a total market share of 13.6%) among asset management companies in India, according to ICRA. Furthermore, its branches are spread across 145 districts in India.

Key Risk

Macroeconomic conditions in India are likely to affect the performance of funds managed by the company, which may in-turn affect AUM managed by it, its management fees and revenue.

Research Disclaimer