Nippon to invest $184 mn to increase stake in Reliance Capital
Reliance Capital Ltd. on Tuesday announced that it has signed an agreement with Nippon Life Insurance (NLI), a Japan-based Fortune 500 company, to increase the latter’s stake from 35% to 49% in Reliance Capital Asset Management (RCAM).
As part of the agreement, the Japanese insurance major will invest Rs.1,196 crore ($184 million) in trenches to acquire an additional 14% stake in Reliance Capital.
“The transaction pegs Reliance Capital Asset Management’s valuation at Rs.8,542 crore ($1.3 billion), the highest valuation till date for any asset management company in the country,” Reliance Capital Ltd. said in a statement.
“Both Reliance Capital and Nippon Life Insurance have enjoyed an extraordinary relationship in the last few years and we see this mutual respect and commitment growing stronger with time. Together we are determined to grow our businesses multifold and have stronger footprint in India and abroad”, Reliance Group Chairman Anil Ambani said.
The $6.6-billion company had acquired 26% stake at Rs.5,600 crore ($920 million) in Reliance Capital in 2012. It increased its stake to 35% with a total investment of about Rs.7,300 crore ($1.2 billion) in 2015.
Following the approval of this transaction— expected to be completed in the current financial year, subject to receipt of regulatory approvals – Nippon Life Insurance will become the co-sponsor in RCAM.
The name of the company will also change to Reliance Nippon Life Asset Management from its current Reliance Capital Asset Management.
The latest transaction will make Nippon Life as one of the largest life insurer in the world, with total managing asset worth $520 billion (Rs.33.8 lakh crore).
Reliance Capital Asset Management is India’s largest asset manager, managing assets worth Rs. 2.43 lakh crore ($38.3 billion) as on June 30, 2015.
“Reliance Group and Nippon Life have built a strong partnership through exchanges and collaborations in various fields. We believe this investment will further strengthen the ties of both companies, achieve perpetual growth and contribute to further economic development of India and Japan,” said Nippon Life Insurance President Yoshinobu Tsutsui.
October 13, 2015 | 5:19pm IST.
to success.