Anil Ambani led Reliance Capital has decided to exit the mutual fund business. Nippon Life Insurance of Japan announced today that it would increase its stake in Reliance Nippon Life AMC to 75% subject to regulatory approval.
Currently, both Reliance and Nippon Life have 42.88% stake in the Reliance Nippon Life AMC. The rest is with public shareholders.
In a press release, the company said, “Reliance Capital will exit its entire Reliance Nippon Life Asset Management shareholding to Nippon Life Insurance, and Offer For Sale to other financial investors to ensure the minimum free float requirement of 25% is also met.”
With this, Nippon Life will hold 75% stake in the AMC and the rest will be with public shareholders. The new fund house may be named as Nippon Life Mutual Fund. It would become the largest fund house backed by the foreign promoter ahead of Franklin Templeton MF.
Nippon Life will retain the existing management of the fund house, said the company press release.
Nippon Life Insurance will make the mandatory open offer at Rs.230 per share, in accordance with the SEBI Takeover Regulations. The open offer price represents a premium of 15.5% to the minimum 60-day price.
The 30-year-old Nippon Life Insurance manages assets of over USD 700 billion.
Currently, Reliance Nippon Life Mutual Fund is the fifth largest fund house and manages AUM of Rs.2.33 lakh crore as on March 2019.
