Reliance Nippon Life AMC is planning to use portion of the IPO proceeds to fund inorganic growth, a company official said today.
"The proceeds of the proposed IPO will be used partly to fund inorganic expansion of its business," Saugata Chatterjee, head (sales and distribution) of Reliance Nippon Life AMC told reporters here today.
The company, a joint venture between Reliance ADAG and Nippon Life of Japan, would both issue fresh shares and offer for sale (OFS) of promoters' holdings to raise around Rs 1,500 crore from the market through the IPO.
Chatterjee said that the company would be the first among the AMCs in the country to come out with a public offer.
The company would divest 10 per cent of its shareholding. While Nippon Life would divest five per cent, Reliance Capital 1.5 per cent, the balance being issue of fresh shares.
He said Rs 600 crore would accrue to the company through issue of fresh shares.
An amount of Rs 165 crore had been set aside for inorganic growth funding, he said.
The balance amount would be expended on expansion of its branch network to all the districts of the country and for penetration into the digital space and on technology.
Post-IPO, both the promoters would hold 42.88 per cent each.
IIFL also holds a portion of shareholding in the company.
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