Anil Ambani-led Reliance Group's asset management arm filed draft papers with markets regulator Sebi to float an IPO, which is expected to value the company at about Rs 18,000 crore, merchant bankers said.

It would be the first initial public offering by a major asset management company (AMC) in India, though smaller rival UTI Mutual Fund's IPO plans have been in the works for a long time. It will also be the first IPO from Reliance Group after Reliance Power in 2008.

The public issue of Reliance Nippon Life Asset Management (RNAM) comprises fresh issue of 2,44,80,000 equity shares, besides an offer for sale of 1,12,30,200 shares by Reliance Capital and 2,54,89,800 scrips by Nippon Life Insurance Company, as per the draft papers filed with Sebi. The IPO size aggregates to 10 per cent of the post issue paid up capital of RNAM.

Proceeds from the initial public offer (IPO) will be used for organic and inorganic opportunities. Typically, asset management companies are valued at 5 per cent of AUM, which is likely to give RNAM a valuation of about Rs 18,000 crore. A 10 per cent stake sale could fetch Rs 1,800 crore, bankers said.

RNAM, jointly owned by Japan's Nippon Life and Reliance Capital, is the asset manager of Reliance Mutual Fund with 11.42 per cent market share. It has an asset base of over Rs 3.6 lakh crore, including Rs 2.23 lakh crore for mutual funds. The company has appointed JM Financial, CLSA, Nomura and Axis Capital as the global coordinators and book running lead managers. In June, the board of RNAM had approved a proposal to list its shares on the stock exchanges. RNAM CEO Sundeep Sikka had said the company initially aims to dilute 10 per cent stake by March and further 15 per cent over three years as per Sebi norms.

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