Reliance Mutual Fund's offer for sale fails to garner full subscription

Shares meant for retail investors in Reliance Nippon Life Asset Management’s (popularly known as Reliance Mutual Fund) offer for sale (OFS) failed to garner full subscription. 

The offering saw bids for 1.5 million shares, which was only 28 per cent of 5.3 million shares put on offer. Investment bankers said the unsubscribed shares in the retail book would be allotted to institutional investors. On Friday, the institutional investor portion of the OFS garnered 1.6 times more demand than the shares on offer. 

Reliance Capital (RCap) offloaded a 8.65 per cent stake in Reliance MF through the OFS . The share sale is part of an agreement between RCap and Japan’s Nippon Life, where the former will sell its entire shareholding in Reliance MF. Following the OFS, the Anil Ambani group company’s stake in Reliance MF will fall from 42.88 per cent to 34.23 per cent.

Shares of Reliance MF fell 1.8 per cent to close at Rs 223 on the BSE. The base price for the OFS was set at Rs 218 per share. Meanwhile, Japan’s Nippon Life has launched an open offer to acquire 14.6 per cent public shareholding of Reliance MF. Nippon Life currently holds 42.88 per cent stake in the asset manager. The Japanese firm has announced that it plans to hike its stake to 75 per cent. Depending on how much shares it is able to garner through the open offer, it will buy the remaining from RCap, as part of an agreement inked between the two joint venture partners on Thursday. Following the transaction, if RCap is left with any stake in Reliance MF, it will be sold in the open market.In a separate development, Rcap on Monday announced that it had released of pledge over its 8.66 per cent shareholding in Reliance MF.