Reliance Nippon Life AMC Renamed As Nippon India Mutual Fund
The unveiling of RNAM’s new name, Nippon India Mutual Fund, in New Delhi on Monday. (Photo: BloombergQuint)

Reliance Nippon Life AMC Renamed As Nippon India Mutual Fund

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Reliance Nippon Life Asset Management Co. Ltd. is now Nippon India Mutual Fund.

Japan’s Nippon Life Insurance Co. has renamed its joint venture with Reliance Capital Ltd. after buying out the latter’s stake in the business. It now plans to recapture the market share the mutual fund house had lost in the past few years, Nippon India Mutual Fund’s Chief Executive Officer Sundeep Sikka said in New Delhi on Monday.

He was speaking at an event to unveil the new name of Reliance Mutual Fund.

RNAM was the market leader in the mutual fund space until a few years ago but slipped to the fifth spot as institutional investors pulled out their investments in the troubled company.

"We will recover the losses in AUM (assets under management) that have happened," Sikka said. According to him, retail investors have stayed with the asset manager and it has been able to grow its market share as well.

Nippon Life's Global President Hiroshi Shimizu, who was present at the event, reposed faith in Sikka, and said that a strong team led by him—coupled with the opportunity presented by the under-penetrated Indian market—compelled Nippon Life to increase its stake in the joint venture.

Nippon Life has paid Rs 6,000 crore for 75 percent stake in RNAM, making it the single-largest shareholder and promoter, Sikka said. The Japanese firm had entered the joint venture by buying a 26 percent stake in 2012.

According to Sikka, the domestic mutual fund space has only two percent penetration. Nippon India Mutual Fund will now focus on rural and semi-urban segments to grow its business and will push its products online as well, he said.

Reliance Mutual Fund has 300 physical touch-points and 78,000 distributors in India. As of June, it had Rs 2.22 lakh in assets under management, down four percent from the preceding quarter.

The asset manager has raised commitments of $200 million from marquee Japanese investors, and will continue to get foreign investors into the country, Sikka said. It manages $2 billion of foreigners' money which is invested in the domestic market.

On Monday, RNAM shares rose 2.31 percent to Rs 277.35 apiece on the BSE while the benchmark Sensex shed 0.38 percent to end the day at 37,531.98 points.

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