Reliance Nippon strategy

Reliance Nippon Life Asset Management Company, which is set to hit the capital market on October 25, plans to use part of its IPO proceeds to fund inorganic growth.

By A Staff Reporter in Calcutta
  • Published 17.10.17
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AIMING BIG: Saugata Chatterjee in Calcutta on Monday. A Telegraph picture

Calcutta: Reliance Nippon Life Asset Management Company, which is set to hit the capital market on October 25, plans to use part of its IPO proceeds to fund inorganic growth.

According to Saugata Chatterjee, head (sales and distribution) of Reliance Nippon Life AMC, the company will set aside Rs 165 crore of the IPO proceeds to be deployed by fiscal 2021.

The firm, a joint venture between Reliance Capital and Nippon Life of Japan, will tap the market with a public offer consisting of a fresh issue of 24,480,000 equity shares and an offer for sale of 36,720,000 equity shares at a price band of Rs 247 to Rs 252 per share.

The dilution of 10 per cent equity will fetch the company around Rs 1,500 crore, which the mutual fund firm plans to use to expand branch network, upgrade IT infrastructure, spend on advertising and loans to subsidiary Reliance AIF (investment management for high net worth individuals) and fund acquisitions and other corporate expenses.

In 2015, the company had acquired the asset management rights, obligations, liabilities, and responsibilities of the 12 schemes of Goldman Sachs Mutual Fund (in India).

"The management is exploring inorganic expansion opportunities and, therefore, part of the proceeds will be set aside. The idea is to have the funds available to us when the need arises," Chatterjee said on Monday.