Nippon Life-Reliance Capital deal gets OK

Japanese firm Nippon Life has got the market regulator's nod for raising its stake in Reliance Mutual Fund to 49 per cent. The company on Thursday received an approval from Securities and Exchange Board of India for increasing Nippon Life Insurance's stake from 35 to 49 per cent, Reliance Capital Asset Management (RCAM) said.

The firm had already received a nod from the competition watchdog. RCAM added that Nippon Life Insurance would become the co-sponsor in Reliance Mutual Fund, along with Reliance Capital, after the completion of the stake sale.

The Japan-based firm already holds 26 per cent stake in RCAM, which it had acquired for Rs 1,450 crore in 2012 while valuing the firm at Rs 5,600 crore then.

Going by the deal, Nippon Life Insurance Company in February acquired nine per cent additional stake in RCAM for Rs 657 crore.

The Japanese company will now be investing an aggregate value of Rs 1,196 crore to acquire an additional 14 per cent stake in RCAM, in tranches, to reach a 49 per cent stake, RCAM said.

RCAM runs Reliance MF and is part of Anil Ambani-led Reliance Group's financial services arm, Reliance Capital.

Nippon Life manages over $500 billion (Rs 30 lakh crore) in assets, highest in the world for any life insurer.

RCAM is the largest asset manager in India, in terms of Assets Under Management, managing Rs 2,61,424 crore ($39.6 billion) as on December 31, across mutual funds, pension funds, managed accounts, and offshore funds.

The deal was entered between the parties in November last year.