CCI okays Nippon Life's proposal to acquire stakes in R-Cap

The deal, valued at an aggregate amount of Rs 1,450 crore, is the largest FDI deal in any Indian asset management firm

Competition watchdog CCI has approved the proposal of Japanese major Nippon Life to acquire 26 per cent stake in Reliance Capital's mutual fund arm RCAML.

The deal, valued at an aggregate amount of Rs 1,450 crore, is the largest Foreign Direct Investment (FDI) deal in any Indian asset management company till date.

"Considering the facts on record and the details provided in the notice...And the assessment of the proposed combination, the Commission is of the opinion that the proposed combination is not likely to have any appreciable adverse effect on competition in India and therefore... approves the proposed combination," CCI said in an order.

The Competition Commission of India (CCI) noted that Nippon Life, which is a global player in providing asset management and portfolio management services, has no direct operations or presence in India in the same space, except for a 26 per cent equity participation in Reliance Life Insurance Company Limited, a subsidiary of RCap.

"It is observed from the information available on the website of the Sebi that there are more than 40 other AMCs registered with the Sebi providing services similar to the asset management services provided by RCAML in India and there are more than 250 portfolio managers registered with Sebi providing similar services," it said.

First announced in January this year, Nippon Life will invest an aggregate value of Rs 1,450 crore ($290 million) to acquire 26 per cent stake Reliance Capital Asset Management Company (RCAML).

The transaction pegs the valuation of Reliance Capital Asset Management at around Rs 5,600 crore ($1.1 billion).

This deal further expands Reliance Capital's partnership with Nippon Life. In October last year, Reliance Capital completed a 26% stake sale in its life insurance venture, Reliance Life, to Nippon Life for over Rs 3,000 crore.

Reliance Capital Asset Management (RCAM) manages around Rs 1,40,000 crore assets.

Nippon Life is a Fortune 100 company and the seventh- largest life insurer in the world. It is a leading private life insurer in Asia and Japan.

CCI is empowered by an Act of Parliament to scrutinise high-value deals that could have a bearing on fair competition in the market.