Reliance Nippon Life Asset Management Ltd (RNAM) is the third largest Asset
Management Company (AMC) in terms of quarterly average AUM (QAAUM) with
11.4% market share and is ranked second most profitable AMC. RNAM managed
`3,84,061cr as on August 2017, which includes Mutual Fund (`2,28,329cr),
Managed Account (`1,53,509cr) and offshore funds & advisory mandates
(`2,223cr). It is also the second largest AMC among retail investors (market share
of 13.6%), having 7.01 million investor folios, of which 6.72 million retail folios.
Outlook & Valuation: At the upper end of the IPO price band it is offered at 37x
its FY2017 EPS and 8x its FY2017 book value (Pre-IPO), demanding `15,442cr
market cap, which is 6.8% of the MF AUM (`2,28,329cr for the month of August
2017). Considering that RNAM is the third largest AMC coupled with huge
potential of MF industry to grow, strong return ratios, asset light business, higher
dividend payout ratio and track record of superior investment performance, we
are positive on this IPO and rate it as SUBSCRIBE.

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