RCap pledges 22% stake in Anil Ambani group's mutual funds arm RNAM

Reliance Capital (RCap) — the financial services arm of the troubled Anil Ambani group — has pledged 22 per cent of its stake in Reliance Nippon Life Asset Management (RNAM), according to exchange disclosures. 

People in the know said the pledges were created as some lenders sought comfort from RCap over certain loans.  

“The pledges will be released as soon as Nippon Life pays RCap for acquiring its stake in RNAM. The monies should come in two weeks after closure of the open offer, which is set to conclude in early August. 

If RCap has any residual stake left, it can be sold in the open market,” said one of the people.

According to the exchange disclosures, the pledged shares were placed in an escrow account.  The pledges  were created on July 22/23. 

The pledging was done in favour of IDBI Trusteeship and Axis Trustee Services, who were acting on behalf of some of the creditors.  

L&T MF, Invesco MF, Birla Sun Life MF, DHFL Pramerica MF and UTI MF were among the fund houses in favour of whom the pledge was created. Other entities named in the disclosures are IndusInd Bank and Powerica — a diesel genset and wind power company.  

RCap is in the process of exiting the mutual fund (MF) business. Earlier this year, RCap invited its joint-venture partner Nippon Life to pick up its 42.88 per cent stake in RNAM. To meet the minimum public shareholding norm laid down by the Securities and Exchange Board of India (Sebi), RCap later brought its stake down to 32.13 per cent. 

To comply with the regulator’s norms, RCap sold 10.75 per cent of its stake through an offer for sale in June, which fetched Rs 1,450 crore. Nippon Life may make full or partial purchase of the balance 32 per cent stake (of RCap), depending on how public shareholders respond to the ongoing open offer. Nippon Life had initiated the takeover process in May by entering into a definitive agreement with RCap.

Overall, RCap is expected to receive Rs 6,000 crore from exiting the MF business. RCap has said the monetising of its RNAM stake, along with other asset monetisation plans, may bring down its debt burden by at least Rs 12,000 crore.