Anil Ambani’s Reliance Capital is exiting the mutual fund business by selling its stake in RNAM to Nippon Life Insurance. (Photographer: Adeel Halim/Bloomberg)

Nippon Life Makes Open Offer To Acquire 22.49% Stake In Reliance Nippon AMC

Nippon Life Insurance Co. on Friday announced an open offer to acquire nearly 22.49 percent stake in Reliance Nippon Life Asset Management Ltd. for Rs 3,179 crore under a deal with Anil Ambani’s Reliance Capital Ltd., which is exiting the mutual fund business.

Nippon Life would acquire up to 13.82 crore equity shares, or about 22.49 percent, of RNAM at Rs 230 apiece, according to the RNAM's draft filed with the Securities and Exchange Board of India on Friday.

The transaction is to be payable in cash for a total consideration of Rs 3,179.41 crore.

Reliance Capital had in May announced its plan to exit the mutual fund business by selling its stake in RNAM to its joint venture partner Japan's Nippon Life Insurance.

Reliance Capital and Nippon Life had 42.88 percent stake each in the company, while the rest is with public shareholders. Reliance Capital has already signed the binding definitive agreements with Nippon Life Insurance of Japan.

An open offer is a mandatory condition under Sebi guidelines for acquiring equity shares in a company (target) by the acquirer company (Nippon Life).

RNAM has already sold 4,82,83,405 equity shares through an offer for sale undertaken on May 24 and May 27.

Also read: What Reliance Capital Will Be Left With After Asset Sales

Upon completion of the acquisition of shares, Nippon Life will have the right to re-constitute the board of directors in RNAM, including the right to appoint nominee directors or effect resignation of any director on the board.

RNAM had registered a net profit of Rs 486.09 crore in fiscal ended March 2019, up 6.7 percent from Rs 455.74 crore a year ago.

Also read: What Reliance Capital Owes Lenders

Nippon Life of Japan will acquire the stake in RNAM through its internal accruals and it has earmarked Japanese Yen 58,000 million (equivalent to Rs 3,676.04 crore).

On Friday, RNAM shares rose 0.30 percent to Rs 219.55 apiece on the BSE while the benchmark Sensex gained 0.22 percent to end the day at 39,615.90.

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