Anil Ambani-led Reliance Capital will sell up to 6.3 per cent stake in Reliance Nippon Life Asset Management —commonly referred to as Reliance Mutual Fund —through the offer for sale (OFS) route, on Wednesday.
The share sale is part of Reliance Capital’s deleveraging programme, which involves exiting the asset management operations, among other businesses. At present, Reliance Capital holds 32.12 per cent stake in Reliance MF.
Close to 21.5 per cent of this will be sold to Japan’s Nippon Life, which will then become the sole promoter of the fund house.
If the OFS is fully subscribed, Reliance Capital will be left with a residual stake of 4.4 per cent, which will then be sold to public investors on a later date.
The floor price for the OFS has been fixed at Rs 262, which is a discount of 8.4 per cent to Reliance MF’s last close of Rs 286, on the BSE.
A total of 38.6 million shares will be sold in the OFS, of which a tenth is reserved for retail investors and will be auctioned on Thursday.
At the floor price, Reliance Capital will mop up an estimated Rs 1,012 crore. Market players say that demand for the OFS could be strong, given the attractive discount and huge traction in share prices of asset management companies. Shares of Reliance MF have rallied 80 per cent so far this year. Bigger rival HDFC MF, too, has seen a similar spurt in its share price. Last month, Nippon Life announced the conclusion of an open offer, which was triggered by the change in ownership of Reliance MF.
In the open offer, Nippon Life had acquired 10.6 per cent stake, taking its shareholding from 42.9 per cent to 53.5 per cent, as a result. The Japanese company intends to take its total stake to 75 per cent, the maximum a promoter is allowed to hold.
People with knowledge of the matter say the remaining 21.54 per cent stake will be acquired by Nippon Life from Reliance Capital soon.
Analysts say that the stock of Reliance MF has witnessed a re-rating, following the change in ownership from joint control between Reliance Capital and Nippon Life, to sole control by the latter.
The stock, however, still trades at a discount to peer HDFC AMC.