Reliance Nippon Life, Rel Capital shares jump 7 pc

Shares of Reliance Nippon Life Asset Management (RNAM) and Reliance Capital jumped up to 7 per cent Thursday after the latter said it will exit the mutual funds business.

The scrip of RNAM climbed 6.98 per cent to close at Rs 233.75 on the BSE. During the day, it jumped 9.70 per cent to Rs 239.70.

Shares of Reliance Capital gained 2.77 per cent to close at Rs 131.90. During the trade, it advanced 8.60 per cent to Rs 139.40.

Reliance Capital Thursday said it will exit the mutual funds business by selling its stake in Reliance Nippon Life Asset Management Ltd (RNAM) to its joint venture partner Japan's Nippon Life Insurance.

Both partners hold 42.88 per cent each in the company, while the rest is with public shareholders.

"Pursuant to the agreements, Nippon Life will also make an open offer to the public shareholders of RNAM at Rs 230 per share, as required under Sebi regulations, and reach the maximum permissible promoter shareholding of 75 per cent for listed companies," Reliance Capital said in a regulatory filing.

Reliance Capital said it will receive proceeds of approximately Rs 6,000 crore through sale of its shareholding to Nippon Life Insurance at Rs 230 a share and the simultaneous Offer For Sale (OFS) to other financial investors.

"The entire proceeds of Rs 6,000 crore will be utilised to reduce Reliance Capital's outstanding debt by 33 per cent," it added.