Nippon Life hikes stake in Reliance MF to 35%

Nippon, which earlier held 26%, plans to hike its holding to 49% in tranches

Japanese financial services giant Nippon Life has completed its acquisition of 9 per cent additional stake in Reliance Capital Asset Management (RCAM) for Rs 657 crore, taking its total equity to 35 per cent.

RCAM, which runs the top fund house Reliance Mutual Fund and is part of Anil Ambani-led Reliance Group's financial services arm Reliance Capital, said in a statement that it has received the entire transaction proceeds of Rs 657 crore ($108 million) from Nippon Life Insurance.

Nippon, which had earlier acquired 26 per cent stake, plans to further hike its holding to 49 per cent in tranches, for which all necessary approvals were received recently.

The latest transaction pegs the valuation of Reliance Capital Asset Management at about Rs 7,300 crore (USD 1.2 billion).

"We are happy to strengthen our partnership with Nippon as they increase their stake in RCAM from existing 26 per cent to 35 per cent in first tranche.

"We believe their expanded role will accelerate our growth, reach and performance in India and also help us in our global presence," Reliance Capital CEO Sam Ghosh said.

Nippon has an option to increase its stake further in Reliance Capital Asset Management by acquiring up to 14 per cent additional stake, to reach 49 per cent, in tranches.

RCAM is the largest asset manager in India, managing assets worth Rs 2,29,060 crore ($36.9 billion) as on December 31, 2014, across mutual funds, pension funds, managed accounts and offshore funds.

Nippon Life is already a strategic partner in RCAM and had acquired 26 per cent stake for Rs 1,450 crore in 2012.

That transaction had pegged the total valuation of RCAM at approximately Rs 5,600 crore.

Nippon is one of the largest asset manager across the world with nearly $500 billion (Rs 30 lakh crore) in assets. It is the seventh largest life insurer in the world and the biggest in Japan as well as the entire Asia.