Ashika Stock Broking Limited Ashika Research - Equities 1 IPO Note: Reliance Nippon Life Asset Management Ltd. Issue Snapshot Company Name Reliance Nippon Life Asset Management Ltd. Issue Opens October 25, 2017 to October 27, 2017 Price Band Rs. 247 to Rs. 252 Bid Lot 59 Equity Shares and in multiples thereof. The Offer Public issue of 61,200,000 Equity shares of Face value Rs. 10 each, (Comprising of fresh issue of 24,480,000 Equity Shares* (Rs. 616.90 cr*) and Offer for Sale of 36,720,000 Equity Shares (Rs. 925.34 cr) by Selling Shareholder). Issue Size Rs. 1511.64 – 1542.24 Crore IPO Process 100% Book Building Face Value Rs. 10.00 Exchanges NSE & BSE BRLM JM Financial Institutional Securities Limited, CLSA India Private Limited, Nomura Financial Advisory and Securities (India) Private Limited, Axis Capital Limited, Edelweiss Financial Services Limited, IIFL Holdings Limited, SBI Capital Markets Limited and YES Securities (India) Limited Registrar Karvy Computershare Private Limited Industry: BFSI Recommendation: Subscribe Date: October 23, 2017 1008, Raheja Centre, 214, Nariman Point, Mumbai-400 021, Ph- 022 – 6611 1700, Extn. - 704 www.ashikagroup.com Issue Break up Issue Size Allocation Equity Shares* QIB 50% 30,600,000 HNI 15% 9,180,000 RII 35% 21,420,000 Total Public 100% 61,200,000 *Based on higher price band @ Rs. 252 Company Highlights Reliance Nippon Life Asset Management Ltd. (RNLAM) is one of the largest asset management companies in India, managing total AUM of INR 3,625.50 billion as of June 30, 2017. It is involved in managing (i) mutual funds (including ETFs); (ii) managed accounts, including portfolio management services, alternative investment funds (“AIFs”) and pension funds; and (iii) offshore funds and advisory mandates. It was ranked the third largest asset management company, in terms of mutual fund quarterly average AUM (“QAAUM”) with an overall market share of 11.4%, as of June 30, 2017 (Source: ICRA). For the financial year 2016, it was ranked the second most profitable asset management company in India, (Source: ICRA). It started mutual fund operations in 1995 as the asset manager for Reliance Mutual Fund, managed QAAUM of Rs. 2,229.64 billion and 7.01 million investor folios, as of June 30, 2017. It managed 55 open-ended mutual fund schemes including 16 ETFs for Reliance Mutual Fund as of June 30, 2017. It has a pan-India network of 171 branches and approximately 58,000 distributors including banks, financial institutions, national distributors and independent financial advisors, as of June 2017. As part of its managed accounts business, it provides portfolio management services to high net worth individuals and institutional investors including the Employees’ Provident Fund Organisation (“EPFO”) and Coal Mines Provident Fund Organisation (“CMPFO”). Its subsidiary, Reliance AIF Management Company Limited (“Reliance AIF”) manages two alternative Objects of the Offer Offer for Sale The Company will not receive any proceeds from the Offer for Sale by the Selling Shareholder (upto 25,489,800 Equity Shares by Nippon Life and up to 11,230,200 Equity Shares by Reliance Capital). Fresh Issue Setting up new branches and relocating certain existing branches (Rs. 38.31 cr.); Upgrading the IT system (Rs. 40.65 cr.); Advertising, marketing and brand building activities (Rs. 72.09 cr.); Lending to company's subsidiary (Reliance AIF) for investment as continuing interest in the new AIF schemes managed by Reliance AIF (Rs. 125 cr.); Investing towards company's continuing interest in new mutual fund schemes managed by them (Rs. 100 cr.); Funding inorganic growth and other strategic initiatives (Rs. 165 cr.); and Meeting expenses towards general corporate purposes.
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IPO Note: Reliance Nippon Life Asset Management Ltd.
Issue Snapshot
Company Name Reliance Nippon Life Asset Management Ltd.
Issue Opens October 25, 2017 to October 27, 2017
Price Band Rs. 247 to Rs. 252
Bid Lot 59 Equity Shares and in multiples thereof.
The Offer
Public issue of 61,200,000 Equity shares of Face value Rs. 10 each, (Comprising of fresh issue of
24,480,000 Equity Shares* (Rs. 616.90 cr*) and Offer for Sale of 36,720,000 Equity Shares (Rs. 925.34
cr) by Selling Shareholder).
Issue Size Rs. 1511.64 – 1542.24 Crore
IPO Process 100% Book Building
Face Value Rs. 10.00
Exchanges NSE & BSE
BRLM
JM Financial Institutional Securities Limited, CLSA India Private Limited, Nomura Financial Advisory and
Net increase/(decrease) in cash and cash equivalents 29.7 10.0 (5.0) 19.3 (39.8) 39.6
Cash and cash equivalents at the beginning of the year 25.5 55.2 65.2 60.2 79.5 39.7
Cash and cash equivalents at the end of the year 55.2 65.2 60.2 79.5 39.7 79.4
Source: RHP
Comparison with listed industry peers
Financial Statement
Cash Flow Statement
(In Rs. Cr) FY13 FY14 FY15 FY16 FY17 Q1FY18
Share Capital 11.5 11.3 41.3 41.5 41.5 41.5
Net Worth 1457.7 1554.1 1536.0 1791.9 1892.6 1680.3
Non Current Liabilities 2.9 2.5 3.3 7.5 11.6 13.5
Current Liabilities 96.6 148.5 153.4 122.5 147.1 234.4
Fixed Assets 20.0 14.2 7.1 11.9 251.1 245.1
Non Current Assets 1100.9 426.6 716.8 921.7 749.4 756.8
Current Assets 440.2 1268.1 977.7 997.2 1050.7 926.2
Total Assets 1561.1 1708.9 1701.6 1930.8 2051.3 1928.1
Revenue from Operations 608.7 675.9 847.2 1200.1 1307.5 364.4
Revenue Growth (%) 11.0 25.4 41.6 9.0
EBITDA 175.9 241.2 362.8 413.0 470.8 108.1
EBITDA Margin (%) 28.9 35.7 42.8 34.4 36.0 29.7
Net Profit 230.4 270.6 354.5 396.4 402.8 87.8
Net Profit Margin (%) 37.8 40.0 41.8 33.0 30.8 24.1
Earnings Per Share (Rs.) 207.5 245.1 320.6 344.1 349.6 76.0
Return on Networth (%) 16.0 17.0 23.0 22.0 21.0 5.0
Net Asset Value per Share (Rs.) 1265.0 1349.0 1307.0 1529.0 1617.0 1433.0
Source: RHP, Ashika Research
There are no listed companies in India that engage in the similar line of business. Hence, it is not possible to provide an
industry comparison in relation to the Company.
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51008, Raheja Centre, 214, Nariman Point, Mumbai-400 021, Ph- 022 – 6611 1700, Extn. - 704 www.ashikagroup.com
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Paras Bothra President Equity Research [email protected] +91 22 6611 1704