On November 26, 2014, India-based Reliance Capital announced that Japan-based Nippon Life Insurance had agreed to increase its stake in Reliance Capital Asset Management, a part of Reliance Capital, from 26% to 49%.
On November 26, 2014, Reliance Capital announced that Nippon Life Insurance (“Nippon”), a Japan-based Fortune 100 company, had agreed to increase its stake in India-based Reliance Capital Asset Management (“RCAM”). Nippon will increase its stake in RCAM from the existing 26% to 49% in two or more tranches. Nippon will be investing an aggregate value of Rs. 657 crore ($108 million) to acquire an additional stake of 9% in RCAM in the first tranche, to reach a 35% stake. The transaction pegs RCAM’s valuation at approximately Rs. 7,300 crore ($1.2 billion).
This transaction is expected to close within the current financial year, subject to receipt of regulatory approvals. Subsequently, Nippon will have the option to increase its stake further by an additional 14%, to reach 49%, in tranches.
RCAM is the largest asset manager in India managing Rs. 2,18,338 crore ($36 billion) as of September 30, 2014, across mutual funds, pension funds, managed accounts and offshore funds. Nippon is Japan’s largest private life insurer with approximate revenues of Rs. 3,53,368 crore ($59 billion) and profits of over Rs. 15,000 crore ($2.5 billion).
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