On 11th September 2019 i.e. Wednesday Anil Ambani made an announcement. He announces that the Reliance Capital is going to exit the Business of Mutual Funds.
Reliance Capital is a joint venture of Nippon Life Insurance Company. As now, Reliance Capital has thought to exit Mutual Fund Business, so they invited the Nippon Life Insurance Company to acquire their entire 42.88% stakes. After the research, we came to a point that the shares of Reliance Nippon Life Asset Management surged around 20% to close.
Both the Reliance Capital and Reliance Nippon Life Asset Management hold equal stakes of 42.88% each. Whereas public stakeholders hold the remaining 14.42% stake. The date from the Reliance Mutual Fund Association shows that there is an average asset of 2.36 lakh crore.
The officials in this industry in the month of February said that the deal valuation is not known yet. If the transaction goes through, then it will directly trigger an open offer from the Nippon Life. And now the valuation of this open offer had acquired a 10.6 percent stake. As a result of this, Nippon Life took its shareholding from 42.9% to 53.5%. Therefore, after all this 21.5% is sold to Japan’s Nippon Life Association. Further, this the association will become the sole promoter of the fund house.
Now, the Japanese company intends to hold a 75% stake. This is the maximum value that a promoter can hold. From the research, we found Nippon Life will soon acquire the leftover 21.54% stake from Reliance Capital.
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