Nippon Life Insurance (NLI), a fortune 500 company increased its stake in Reliance Capital Asset Management (RCAM) to 49% from the existing 35% for Rs 11.96 bn (USD 184 million).

RCAM said, 'The Japanese company will be investing an aggregate value of Rs 11.96 billion (USD 184 million) to acquire an additional 14% stake in Reliance Capital Asset Management, in tranches, to reach a 49% stake.'

'As a result, the transaction pegs the company's valuation at Rs 85.42 billion (USD 1.3 billion), the highest valuation till date for any asset management company in the country,' it added.

In 2012, the Japanese insurance company had acquired 26% stake in Reliance Capital Asset Management at valuation of approx Rs 56 billion (USD 920 million).

Nippon Life Insurance subsequently increased its stake to 35% at valuation of approx Rs 73 billion (USD 1.2 billion) in 2015.

With this transaction, the Japanese insurer will have invested a total of Rs 33.03 billion (USD 508 million) for acquiring 49% stake in the company. This investment represents largest FDI in Indian mutual fund sector till date.

Anil Ambani, chairman, Reliance Group said, 'Both companies 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.'

The transaction is expected to be completed within the current financial year, subject to receipt of regulatory approvals.

Post approvals, Nippon Life Insurance would become the co-sponsor in Reliance Capital Asset Management. In line with the new shareholding structure, the name of the company will also be changed from Reliance Capital Asset Management to Reliance Nippon Life Asset Management.

Nippon Life insurance is one of the largest life insurer in the world and manages assets of over USD 520 billion (over Rs 33 trillion)

Shares of the company gained Rs 17.95, or 4.73%, to trade at Rs 397.40. The total volume of shares traded was 626,677 at the BSE (1.06 p.m., Tuesday).