Nippon Life Insurance, Japan's largest insurance company, will raise its stake in Reliance Mutual Fund to 49% from the existing 26% in two or more tranches. In the first tranche, the Japanese financial giant will buy a 9% stake in Reliance Mutual Fund for Rs.657 crore. This transaction will value India's largest asset management company Rs.7,300 crore “This transaction is expected to be completed within the current financial year, subject to receipt of regulatory approvals. Subsequently, Nippon Life Insurance will have an option to increase its stake further by an additional 14% to reach 49% in tranches,“ the two companies said in the joint statement.
Nippon acquired 26% stake in Reliance Mutual Fund in 2012 at an aggregate value of Rs.1,450 crore. Nippon Life manages over $500 billion (Rs 30 lakh crore) in assets, highest in the world for any life insurer, while Reliance Mutual Fund is part of Reliance Capital, the financial services arm of Anil Ambani-led Reliance Group. Reliance Mutual Fund dealt in Rs.2,18,338 crore ($36 billion) assets as on September 30, 2014, across mutual funds, pension funds, managed accounts and offshore funds.
Nippon Life also holds a 26% stake in Reliance Life Insurance Company, which it had bought for Rs.3,062 crore. This deal was completed in October 2011 and it had valued the Indian insurer at over Rs.11,500 crore at that point in time.
The Indian government has now proposed to hike FDI cap in the insurance sector from 26% to 49%. The proposal has already been cleared by the Union Cabinet, but needs to be passed by Parliament.
Nippon acquired 26% stake in Reliance Mutual Fund in 2012 at an aggregate value of Rs.1,450 crore. Nippon Life manages over $500 billion (Rs 30 lakh crore) in assets, highest in the world for any life insurer, while Reliance Mutual Fund is part of Reliance Capital, the financial services arm of Anil Ambani-led Reliance Group. Reliance Mutual Fund dealt in Rs.2,18,338 crore ($36 billion) assets as on September 30, 2014, across mutual funds, pension funds, managed accounts and offshore funds.
Nippon Life also holds a 26% stake in Reliance Life Insurance Company, which it had bought for Rs.3,062 crore. This deal was completed in October 2011 and it had valued the Indian insurer at over Rs.11,500 crore at that point in time.
The Indian government has now proposed to hike FDI cap in the insurance sector from 26% to 49%. The proposal has already been cleared by the Union Cabinet, but needs to be passed by Parliament.
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