Nippon to up Reliance MF stake to 49%

Nippon to up Reliance MF stake to 49%

Japan-based life insurance company Nippon Life has decided to increase its stake in Reliance Capital Asset Management (RCAM), by 9 per cent, to 35 per cent by investing Rs 657 crore ($108 million).

The deal pegs RCAM’s valuation at Rs 7,300 crore ($1.2 billion), the highest valuation till date for any asset management company in India, Reliance Capital said in a statement. The Board of Directors of both the companies have approved the stake hike by the Japanese partner. The transaction is expected to be completed within the current financial year, subject to receipt of regulatory approvals. Nippon Life will have an option to increase its stake further by an additional 14 per cent to reach 49 per cent in tranches, the statement added.

Nippon Life had acquired a 26 per cent stake in RCAM in 2012 for an aggregate value pegging the total valuation of the Anil Ambani-promoted company at nearly Rs 5,600 crore ($920 million).

“We welcome Nippon’s decision to further strengthen this partnership and acquire an additional stake in our asset management company. We strongly believe their expanded role in the company will accelerate our growth, reach and performance,” Reliance Capital Chief Executive Officer Sam Ghosh said.

“We look forward to strengthening this relationship and using the collective experience of the two corporations to the advantage of the two global economies,” Nippon Life Insurance President Yoshinobu Tsutsui said.

RCAM is the largest asset manager in India managing Rs 2.18 lakh crore as on September 30, 2014 across mutual funds, pension funds, managed accounts and offshore funds. Nippon Life manages nearly Rs 30 lakh crore ($500 billion) in assets, which is among the largest total assets in the world for any life insurer.

DH Newsletter Privacy Policy Get top news in your inbox daily
Comments (+)