Reliance Capital gained 2.89% to Rs 420.05 at 13:10 IST on BSE after Nippon Life Insurance signed definitive agreements to increase its stake in Reliance Life Insurance, a part of Reliance Capital from the existing 26% to 49%.
The announcement was made during market hours today, 24 November 2015.
Meanwhile, the BSE Sensex was up 36.94 points, or 0.14%, to 25,856.28.
On BSE, so far 2.56 lakh shares were traded in the counter, compared with an average volume of 5.18 lakh shares in the past one quarter.
The stock hit a high of Rs 422.80 and a low of Rs 407.25 so far during the day. The stock hit a 52-week high of Rs 550 on 4 December 2014. The stock hit a 52-week low of Rs 250.80 on 25 August 2015.
Also Read
The stock had outperformed the market over the past one month till 23 November 2015, declining 1.38% compared with 6.01% decline in the Sensex. The scrip had also outperformed the market in past one quarter, gaining 23.9% as against Sensex's 5.65% fall.
The large-cap company has an equity capital of Rs 252.63 crore. Face value per share is Rs 10.
Reliance Capital said that the boards of directors of both the companies, Nippon Life Insurance (NLI) and Reliance Capital, have approved the increase in stake by the Japanese partner, subject to regulatory approvals. This transaction is expected to be completed within the current financial year ending 31 March 2016 (FY 2016), subject to receipt of regulatory approvals. In line with the new shareholding structure, the name of the company will also be changed to Reliance Nippon Life Insurance Company.
The Japanese company will be investing an aggregate value of Rs 2265 crore ($348 million) to acquire an additional 23% stake in Reliance Life Insurance to reach a 49% stake. Nippon Life Insurance would have invested an aggregate of Rs 5327 crore ($ 819 million) for acquiring 49% stake in Reliance Life Insurance with this transaction. NLI has also committed an investment of Rs 3303 crore ($ 508 million) for acquiring 49% stake in Reliance Capital Asset Management, thereby taking its total investment to Rs 8630 crore ($ 1.3 billion), the largest foreign direct investment (FDI) in the financial services sector.
The transaction pegs Reliance Life Insurance's valuation at approx. Rs 10000 crore ($ 1.5 billion), amongst the highest valuations for any Life Insurance company in the country. Nippon Life Insurance's investment also represents an implied Embedded Value (EV) multiple of over 3 times for Reliance Life Insurance, the highest for any private insurer in India till date.
Reliance Life Insurance is amongst the leading private sector life insurance companies in India, in terms of new business premium. Nippon Life Insurance is an over 125 years old insurer and a Global Fortune 500 company that manages over $ 520 billion (Rs 33.8 lakh crore) in assets- amongst the largest total assets in the world for any life insurer. The company is one of the largest life insurer in the world.
On a consolidated basis, Reliance Capital reported 15.2% rise in net profit to Rs 250 crore on 13.3% increase in total income to Rs 2361 crore in Q2 September 2015 over Q2 September 2014.
Reliance Capital, a part of the Reliance Group, is one of India's leading private sector financial services companies.
Powered by Capital Market - Live News
