Nippon Life Insurance (NLI), a Fortune 100 company and the seventh largest life insurer in the world, has completed acquisition of 9% additional stake in Reliance Capital Asset Management (RCAM), a part of Reliance Capital.
The entire transaction proceeds of Rs 6.57 billion (USD 108 million) for this additional 9 per cent stake has been duly received from NLI.
The transaction pegs the valuation of Reliance Capital Asset Management at approx. Rs 7300 crore (USD 1.2 billion).
With this transaction NLI has increased its stake in Reliance Capital Asset Management from the existing 26% to 35%.
NLI had agreed to increase its stake in Reliance Capital Asset Management from the existing 26% to 49% in two or more tranches, subject the regulatory approvals, which have since been received.
''We are happy to strengthen our partnership with Nippon as they increase their stake in RCAM from existing 26 to 35% in first tranche. We believe their expanded role in the Company will accele rate our growth, reach and performance in India and also help us in our global presence'', said Sam Ghosh, CEO, Reliance Capital.
Nippon Life Insurance has an option to increase its stake further in Reliance Capital Asset Management by acquiring upto 14% additional stake, to reach 49%, in tranches.
Reliance Capital Asset Management is the largest asset manager in India managing Rs 2,290.60 billion (USD 36.9 billion) as on Dec. 31, 2014, across mutual funds, pension funds, managed accounts and offshore funds.
Nippon Life Insurance is already a strategic partner in Reliance Capital Asset Management. The company acquired 26% stake in Reliance Capital Asset Management at an aggregate value of Rs 14.50 billion (USD 240 million) in 2012. The transaction had pegged the total valuation of Reliance Capital Asset Management at approximately Rs 56 billion (USD 920 million).
Nippon Life is a 125 year Global Fortune 100 company and manages nearly USD 500 billion (Rs 30 Lakh crore) in assets, amongst the largest total assets in the world for any life insurer. The company is the 7th largest life insurer in the world and the Number 1 private life insurer in Asia and Japan.
Shares of the company gained Rs 13, or 2.92%, to trade at Rs 457.60. The total volume of shares traded was 310,994 at the BSE (2.40 p.m., Friday).
