Shares of Reliance Capital rose by nearly 4 per cent today after Japan's Nippon Life Insurance announced the acquisition of another 23 per cent stake in Reliance Life Insurance for about Rs 2,265 crore.
The stock gained 3.71 per cent to settle at Rs 423.40 on BSE. During the day, it climbed 4.42 per cent to Rs 426.30.
At NSE, shares of the company went up by 3.84 per cent to close at Rs 424.
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In terms of volume, 4.90 lakh shares of the company changed hands at BSE and over 33 lakh shares were traded at NSE during the day.
Nippon's stake in the company, when the deal comes through, will increase to 49 per cent - the upper limit for a foreign player in the private sector insurance firm.
Reliance Life has got the Embedded Value (EV) multiple of over 3, highest in the industry till date. Despite the overall slowdown in the insurance sector, it has managed a strong valuation of about Rs 10,000 crore and highest EV multiple across Life insurance companies.
In line with the new shareholding structure, the name of the company will also be changed to Reliance Nippon Life Insurance Company Limited.
Nippon Life increased stake in Reliance Life to 49 per cent for Rs 2,265 crore. With this, its total investment has reached Rs 8,630 crore for 49 per cent stake each in life insurance and asset management business.
The Boards of Directors of both the companies -- Nippon Life Insurance and Reliance Capital -- have approved the increase in stake by the Japanese partner, subject to regulatory approvals.
