Nippon Life to raise stake in Reliance MF to 49%

NEW DELHI: Japanese financial services giant Nippon Life is set to increase its stake in Reliance Capital Asset Management ( RCAM) to 49 per cent.

Nippon Life Insurance Company has agreed to increase its stake in RCAM from the existing 35 per cent to 49 per cent in two or more tranches.

Following the completion of the transaction, Reliance Capital will receive about Rs 1,200 crore.

In a regulatory filing to the BSE, Reliance Capital said that a meeting of the board of directors of the company's subsidiary, RCAM will be held on March 17 inter alia, to consider and approve transfer of shares to Nippon Life.

Besides, RCAM will change its name to Reliance Nippon Life Asset Management Ltd.

The proposed name "Reliance Nippon Life Asset Management Limited" has been made available by Registrar of Companies, and will be made effective with necessary approvals.

Earlier this month, Nippon Life had received markets regulator Sebi's nod for raising its stake in Reliance Mutual Fund to 49 per cent, completing the regulatory approval process for the deal.

The Japan-based firm had acquired 26 per cent stake for Rs 1,450 crore in 2012 while valuing the company at Rs 5,600 crore at that time.

Nippon Life in February acquired 9 per cent additional stake of RCAM for about Rs 657 crore to take its holding to 35 per cent in the Reliance Group company.

The Japanese company will now be investing an aggregate value of Rs 1,196 crore to acquire an additional 14 per cent stake in RCAM, in tranches, to have 49 per cent stake.

RCAM runs Reliance MF and is part of Anil Ambani-led Reliance Group's financial services arm, Reliance Capital.

Nippon Life manages over USD 500 billion (Rs 30 lakh crore) in assets, highest in the world for any life insurer.

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

The deal was entered between the parties in November, last year.