Nippon Life India Asset Management Ltd. share price target

Reliance Nippon Life Asset Management (RNAM) reported a net profit growth of 10.4% YoY at Rs. 111 cr. The overall mutual fund QAAUM grew at a healthy pace of 5.8% YoY, which was led by 24.6% YoY growth in Equity QAAUM. However, debt QAAUM declined on a YoY basis due to redemption pressure witnessed across the industry during the quarter.

We expect RNAM, being amongst the larger AMCs and having schemes with large AUMs, to face revenue challenges in the near-term but it is in a better position to handle the pressure due to operations of scale.

SEBI notifies significant changes to TER structure In its board meeting held today, SEBI has notified reductions in the maximum TER that can be charged to mutual fund schemes. The regulator has also notified that all commissions and expenses are to be expensed from the MF schemes alone and not through any other route (AMC/Trustee P&Ls; a common industry practice). Moreover, AMCs will no longer be allowed to pay out upfront commissions (except for certain relaxations in the case of SIPs). While the move is a positive step towards increasing reach and reducing costs for retail MF investors and also improves transparency, it has a negative impact on profitability for AMCs....

Profitability in Q1FY19 was impacted due to transition to IND AS, largely on account of MTM losses on investments. Operating profit remained robust at 23% YoY led by improvement in OPMs on controlled opex. Overall AUM rose 8% in Q1, with strong equity AUM growth of 34% yoy.

RNAM reported a strong quarter with PAT for 4QFY18 up 35% YoY at INR 162bn. Quarterly average AUM in equity MF schemes witnessed strong growth (+53% YoY). However, overall quarterly average MF AUM grew 16%, as debt MF schemes faced pressure from rising interest rates. Equity MF schemes now contribute 37% of RNAM's overall MF AUM (on a closing basis), up from 30% as of FY17.RNAM's profitability witnessed a sharp uptick in 4QFY18, with PAT / QAAUM at 26bps for the quarter and 24bps for the full year FY18. However, there were some one-offs for the quarter relating to a) other income (+113% YoY) at INR850mn due to recognition of investment income in MF schemes and accrued interest...

mutual funds has been deepening and is reflected well in the strengthening flows from both Top 15 and B15 locations. Indian mutual fund AUM stood at Rs23tn as of Q4FY18 and the trend suggests a likely growth rate of 22-24% CAGR between FY18-FY22E. This can more than double the MF AUMs beyond Rs50tn market over next four years. We...

Reliance Nippon Life Asset Management Ltd (RNAM) is a unique and currently the only listed play in a highly under-penetrated Indian mutual fund market. Besides being one of the largest Asset Management Company (~Rs 3.9 lac cr) and having ~11% market share in MF

We initiate coverage on Reliance Nippon Life Asset Management (RNLAM) with a BUY rating and a target price of INR 350, valuing the company at 28x FY20E earnings (at CMP stock trades at 36x/ 29x FY18E/ FY19E). We believe RNLAM remains in a favourable position to capitalise on twin trends: a) mutual fund (MF) industry tailwinds as inflows remain strong and...

Reliance Nippon Life Asset Management Ltd (RNL) is one of the largest Asset Management Companies (AMC) in India, managing total Asset Under Management (AUM) of Rs3,625.5bn as on 30 th June 2017. RNL manages Mutual Funds (including ETFs), PMS (portfolio management services), AIFs (alternative investment funds) and Pension Funds. Company is ranked third in terms of quarterly average AUM (QAAUM) for mutual funds and enjoys 11.4% market share. Company currently manages Reliance Mutual fund's 55 open-ended mutual funds...

Issue Open: Oct 25 - Oct 27 Issue Open: Oct 25 - Oct 27, 2017, Price Band: Rs. 247 - 252, Issue Size: 61,200,000 Equity Shares, (Fresh Issue of 24,480,000 eq sh + Offer for sale of 36,720,000 eq sh), Offer Size: Rs.1511.64 crs - 1542.24 crs.