Nippon Life stake hike in Reliance Capital Asset gets SEBI nod

With SEBI on Thursday giving the nod for Japanese Nippon Life Insurance to hike its stakes in Reliance Capital Asset Management to 49 percent, the latter's name will be changed to Reliance Nippon Life Asset Management.

In a statement, Reliance Capital Asset Management said it has completed the regulatory approval process for increasing the stake of Nippon Life Insurance, a Fortune 500 company and one of the largest life insurer in the world, to 49 per cent from the current 35 percent.

The Japanese company will now be investing an aggregate value of Rs.1,196 crore ($184 million) to acquire an additional 14 percent stake in Reliance Capital Asset Management, in tranches.

The transaction pegs Reliance Capital Asset Management's valuation at Rs.8,542 crore ($1.3 billion), the highest valuation till date for any asset management company in the country.

"In line with the new shareholding structure, the name of the company will also be changed from Reliance Capital Asset Management to Reliance Nippon Life Asset Management. Nippon Life Insurance would also become the co-sponsor in Reliance Mutual Fund, along with Reliance Capital, post the completion of stake sale," the statement added.

Before the Securities and Exchange Board of India, the company has already received approval from Competition Commission of India for this stake sale.

"We are thankful to the regulators for granting their approvals to this stake sale and will be completing the transaction in next few days," the statement quoted Reliance Capital executive director and group CEO Sam Ghosh as saying.

The boards of directors of both the companies - Nippon Life Insurance and Reliance Capital Asset Management - had already approved the increase in stake by the Japanese partner, subject to regulatory approvals.

Reliance Capital Asset Management is the largest asset manager in India, in terms of AUM, managing Rs.2,61,424 crore ($39.6 billion) as on December 31, 2015, across mutual funds, pension funds, managed accounts and offshore funds.

Nippon Life Insurance had acquired 35 percent stake in Reliance Capital Asset Management in two tranches - 26 percent for Rs.1,450 crore in 2012 and 9 percent for Rs.657 crore later.