There’s a lot of change happening in the air at India’s fifth-largest asset management company. Reliance Nippon Asset Management has been fully taken over by partner Nippon Life Insurance.
Nippon Life Takes over Reliance Mutual Fund
A top official said on Monday that the Japanese financial services major Nippon Life, after the Rs 6,000-crore acquisition of Reliance Capital’s asset management arm, is going to be focusing on regaining the lost market share it has had in the nation with its JV with the Anil Ambani group.
The fund house is now going to be called Nippon India Mutual Fund (NIMF). All thanks to the Reliance brand, the fund house has been popular with numerous investors.
After the deal, the Reliance Mutual Fund, has been renamed as Nippon India Mutual Fund (NIMF), which used to be the leader in assets under management till a number of years ago, but has fallen to the fifth spot as institutional investors dragged out their money with the troubled enterprise.
Nippon Life arrived Reliance AMC first by purchasing a 26 per cent stake in the year 2012 and at the present it owns as much as 75 per cent, constructing it the single largest promoter.
Chief Executive Sundeep Sikka told reporters that Nippon has paid Rs 6,000 crore for 75 per cent stake. “We will recover the losses in AUM that have happened,” he further added.
Mutual Fund Renames it as Nippon India MF
Sikka, who is going to carry on to lead the new company, said the retail investors have stayed with it and it has been able to grow its market share as well.
Nippon Life’s global president Hiroshi Shimizu also stated a strong team run by Sikka, joined with the prospect that has been offered by the under-penetrated Indian market that made them upsurge their stake in the undertaking. Nippon Life internationally achieves more than Rs 50 lakh crore assets.
Sikka on the other hand also said that the domestic mutual fund space has only 2 per cent penetration as well as the fund house is going to focus on rural along with semi-urban segments. Further than its 300 physical touch-points along with 78,000 distributors, it is going to focus more on digital forms of selling.
The market capitalisation of the registered entity was Rs 16975 crore at the prices on Monay, signifying about 8.4 per cent of its assets. But Nippon Life on the other hand has accepted a 75 per cent stake for Rs 6000 crore. As a consequence, the deal may have gone through at a noteworthy discount to Reliance Nippon AMC’s present market valuation.
In the month of June, the Reliance MF had Rs 2.22 lakh of AUM, which had slid almost 4 per cent in the previous quarter, and was ranked fifth in the list led by HDFC Mutual Fund.
