Reliance Nippon Life Asset Management OFS comprises sale by Reliance Capital for 5.25 per cent of the paid up equity with an additional green shoe option of 3.41 per cent thus aggregating 8.66 per cent of its stake at a floor price of Rs 218 per share.
About RNAM OFS ( Reliance Nippon Life Asset Management OFS)
| Issue Period | 24-05: 27-05-2019 |
| Face Value | 10 |
| Floor Price | 218 |
| M.P . a Day before | 234.5 |
| % Discount of Floor Price | 7.57% |
| Base Offer (shares) | 3,21,10,091 |
| Base Offer in Rs. Crore | 700 |
| Total with GreenShoe (shares) | 5,29,73,245 |
| Total in Rs. Cr. | 1155 |
| Total retail shares | 5297325 |
| Total Retail Rs, Crore | 115 |
Updates:
Clearing Price of Rs 221.50 fixed for the Non Retail Bidding in Reliance Nippon Life Asset Management Ltd
OFS Allocation Methodology
Retail investor shall mean individual investor places bids for Sale
Shares of total value of not more than Rs. 2,00,000/- (Rupees Two Lacs
only) aggregated across the Stock Exchanges (“Retail Investor”).
No discount is being offered to Retail Investors. 10% of the Sale Shares shall be reserved for Retail Investors subject to
the receipt of valid bids (the “Retail Category”). The Stock Exchanges
will decide the quantity of Sale Shares eligible to be considered in the
Retail Category, based on the Floor Price (defined below). Unsubscribed portion of the Sale Shares reserved for Retail Investors shall be available for allocation to the investors in the Non-Retail category choosing to carry forward their bids to T+l Day and who have not been allotted Sale Shares on T Day. However, such investors are required to indicate their willingness to carry forward their bids to T+ 1 Day. Retail Investors will have an option to place a price bid or bid at “Cut off Price”. Cut-Off Price means the lowest price at which the Sale Shares are sold, as shall be determined based on all valid bids received in Non-Retail category on T Day. Upon determining Cut-Off Price for the Retail Category, the Sale Shares reserved for such category shall be allocated to eligible bids of Retail Investors on price priority method at multiple clearing prices in accordance with the SEBI OFS Circulars. In case of excess demand in the Retail Category at the clearing price/Cut-Off Price, allocation shall be done on a proportionate basis at such clearing price/Cut-Off Price (as the case may be). Bids by Retail Investors below the Cut-Off Price shall be rejected.
Settlement shall take place on a trade for trade basis. For bids received from Non-Retail Category on T Day, non-institutional investors and institutional investors who place orders with 100% of the order value deposited upfront, settlement shall take place on a T+I Day. In the case of institutional investors who place bids without depositing 100% of the order value upfront, settlement shall be as per the existing rules for secondary market transactions (i.e., on T+2 Day). For the bids received on T+l Day, from the Retail Category and from the un-allotted non-Retail Investors who choose to carry forward their bid to T+l Day, the settlement shall take place on T+3 Day. In case of non-institutional investors and institutional investors bidding with 100% margin upfront who chose to carry forward their un-allotted bids to T+1 Day, the settlement shall take place<on T+2 Day. The allocation to the non-Retail Investors shall be at price equal to the Cut-off Price or higher as per the bids.
About RNAM
- Reliance Nippon Life Asset Management Limited, formerly Reliance Capital Asset Management Limited, is an asset management company.
- The Company is the asset manager of Reliance Mutual Fund.
- The Company has its business in asset management in the financial services sector.
RNAM Share Price Chart & Financial Overview
Financial Summary
| Market Cap in Rs. Cr | 13,831 |
| Revenue FY18 in cr | 1,745 |
| Net Profit | 505 |
| Equity | 612 |
| CMP in Rs. | 226 |
| Face Value | 10 |
| EPS | 8.25 |
| Price / Earning (PE) | 27.40 |
| Book Value | 41.38 |
| Price / BV | 0.66 |
| ROCE % | 34.50% |
| ROE % | 24.65% |
| Dividend Yield | 2.56% |
| Sales 3 yr CAGR | 23.36% |
| Debt / Equity Ratio | 0 |
| 52 week High/Low | 278.95 / 120.20 |
RNAM OFS: Salient points and Assessment
- Reliance Nippon is the fifth largest asset management company in the country, managing assets worth Rs 2.33 lac crore.
- Reliance Capital, the financial services business of the Anil Ambani group plans to exit mutual funds by selling its entire stake in RNAM to its partner Nippon Life Asset Management. Reliance Capital Ltd ( on 23-05-19 said it has signed binding definitive agreements with Nippon Life Insurance of Japan to exit its stake in Reliance Nippon Life Asset Management Ltd (RNAM).
- Nippon Life will also make an open offer to public shareholders of Reliance Nippon Asset Management (RNAM) at Rs 230 per share.
- The open offer [price of Rs. 230 may act as a temporarily overhang on the share price.
- RNAM at considerable discount due to reliance tag from its peer HDFC AMC It is possible that it should be better with time as reliance exits. However share has ready moved up 10-20% on this news in last 1 month. I intend to apply in small quantity in the OFS.
Standard disclaimer: I am not a SEBI registered analyst. I may have vested interest in every stock I discuss. Please do your own due diligence as stock market investments have high degree of inherent risk.