RCap gains after Nippon Life enhances stake in RCAM

Reliance Capital rose 2.79% to Rs 457 at 13:25 IST on BSE after company said Nippon Life Insurance has completed acquisition of 9% additional stake in Reliance Capital Asset Management, a part of Reliance Capital.

The company made announcement during market hours today, 26 February 2015.

Meanwhile, the S&P BSE Sensex was up 351.67 points or 1.22% at 29,088.82.

On BSE, so far 2.58 lakh shares were traded in the counter as against average daily volume of 6.58 lakh shares in the past quarter.

The stock hit a high of Rs 459.95 and low of Rs 447 so far during the day. The stock had hit a 52-week high of Rs 668.40 on 9 June 2014. The stock had hit a 52-week low of Rs 304.55 on 28 February 2014.

The stock had underperformed the market over the past one month till 26 February 2015, falling 6.53% compared with 1.82% fall in the Sensex. The scrip had also underperformed the market in past one quarter, declining 11.34% as against Sensex's 1.27% rise.

The large-cap firm has equity capital of Rs 245.63 crore. Face value per share is Rs 10.

Nippon Life Insurance (NLI) has completed acquisition of 9% additional stake in Reliance Capital Asset Management (RCAM), a part of Reliance Capital. The entire transaction proceeds of Rs 657 crore ($108 million) for this additional 9% stake has been duly received from NLI, company said.

The transaction pegs the valuation of Reliance Capital Asset Management at approx. Rs 7300 crore ($1.2 billion) With this transaction NLI has increased its stake in Reliance Capital Asset Management from the existing 26% to 35%. NLI had agreed to increase its stake in Reliance Capital Asset Management from the existing 26% to 49% in two or more tranches, subject to regulatory approvals, which have since been received. Nippon Life Insurance has an option to increase its stake further in Reliance Capital Asset Management by acquiring upto 14% additional stake, to reach 49%, in tranches.

Nippon Life Insurance is already a strategic partner in Reliance Capital Asset Management. The company acquired 26% stake in Reliance Capital Asset Management at an aggregate value of Rs 1450 crore ($240 million) in 2012. The transaction had pegged the total valuation of Reliance Capital Asset Management at approximately Rs 5600 crore ($ 920 million).

Reliance Capital Asset Management is the largest asset manager in India managing Rs 229060 crore ($36.9 billion) as on 31 December 2014, across mutual funds, pension funds, managed accounts and offshore funds.

Reliance Capital's consolidated net profit rose 28.3% to Rs 213 crore on 11.5% rise in total income to Rs 2106 crore in Q3 December 2014 over Q3 December 2013.

Reliance Capital, a part of the Reliance Group, is one of India's leading private sector financial services companies.

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