Anil Ambani-led Reliance Capital will on Wednesday promote 6.3 per cent stake in Reliance Nippon Life Asset Administration (generally generally known as Reliance Mutual Fund) via the provide on the market (OFS) route.
The share sale is a part of Reliance Capital’s deleveraging program, which incorporates exiting asset administration operations, amongst different companies. At current, Reliance Capital holds 32.12 per cent stake in Reliance MF.
About 21.5 per cent of this will likely be bought to Japan’s Nippon Life, which is able to later change into the only promoter of the fund home.
If the OFS is totally subscribed, Reliance Capital will likely be left with the remaining 4.4 per cent stake, which is able to then be bought to public traders.
The minimal worth for the OFS has been mounted at Rs 262, which is a reduction of 8.4 per cent in opposition to the final shut of Rs 286 of Reliance MF on BSE.
A complete of 38.6 million shares will likely be bought within the OFS, of which a tenth is reserved for retail traders and will likely be auctioned on Thursday.
Reliance Capital will elevate Rs 1,012 crore on the flooring worth. Market gamers stated the demand for OFS might strengthen on the again of enticing reductions and steep soar in share costs of asset administration firms. Reliance MF shares have gained 80 per cent up to now this yr. Massive rival HDFC MF has additionally seen an identical rally in its share worth. Final month, Nippon Life introduced the closing of an open providing, triggered by a change in possession of Reliance MF.
Within the open provide, Nippon Life had acquired a ten.6 per cent stake, leading to a rise of its stake from 42.9 per cent to 53.5 per cent. The Japanese firm intends to take its whole stake to 75 per cent, with a most of 1 promoter allowed.
Individuals with information of the matter say that the remaining 21.54 per cent stake will quickly be acquired by Nippon Life from Reliance Capital.
Analysts say the re-rating of Reliance MF’s inventory has taken place following the change in possession from the joint management between Reliance Capital and Nippon Life.
Nevertheless, the inventory remains to be buying and selling at a reduction to HDFC AMC.