Reliance Capital, managed by Anil Ambani, is all likely to leave the mutual fund business by selling its entire share in Reliance Nippon Life Asset Management Ltd.
“Reliance Capital Ltd. today [Thursday] he announced that he signed signed binding agreements with Nippon Life Insurance from Japan to leave his part in Reliance Nippon Life Asset Management Ltd., ”said a statement by Reliance Capital.
Reliance Capital and Nippon Life are currently still 42.88% in the asset management company with the balance held by public shareholders. Reliance Capital will receive around ₹ 6,000 crore – ₹ 230 per share – through the share sale. The money will be used to reduce debt owed by Reliance 33%, added the statement.
“The financial value of RNAM's part is part of our value unlocking strategy. We expect this transaction, along with other upcoming deals, to significantly reduce RCap debts by over 50% in the current financial year, ”said the statement that Anil Ambani says.
Open motion is at stake
Nippon Life will also offer an open offer to the asset management company 's public shareholders at ₹ 230 per share – the price represents a premium of 15.5% to the minimum price of 60 days as specified under Occupation Regulations. The Securities and Exchange Board of India (SEBI).
Nippon Life Insurance, a 130 year old company, is one of the largest life insurance companies in Japan, managing assets of over $ 700 billion with revenue of over $ 70 billion and a core operating profit of $ 6.8 billion. He had made his initial investment in the co-finding entity in 2012.
RNAM CEO, Sundeep Sikka, will continue to lead the company, who will manage operations without any change in structure and management.
According to Value Research, a mutual funds tracking company, Reliance Mutual Fund had total assets under the control of 2.2 lakar crore as at 30 April.