Nippon Life to buy additional 14% stake in R-Cap AMC for Rs 1,196 crore

Mumbai: Nippon Life Insurance Co. on Tuesday said it has reached a definitive agreement with Reliance Capital Ltd (R-Cap) to increase its ownership in Reliance Capital Asset Management Ltd from 35% to 49%.

Nippon Life has been a shareholder in the asset management subsidiary of Anil Ambani-controlled R-Cap since 2012 and had the option to increase its stake from 35% to 49%, which it has now exercised.

Nippon Life will pay Rs.1,196 crore to pick up an additional 14% stake, according to a statement from R-Cap. The transaction pegs the valuation of Reliance Capital Asset Management at Rs.8,542 crore, the statement added.

“Nippon Life and Reliance Asset have developed a mutual understanding by exchanging human resources, and Nippon Life has strengthened Reliance Asset’s corporate governance by dispatching a board director (part-time) and posting expatriate staff,” R-Cap said in the statement.

In addition, both companies have also developed a number of business collaborations, such as mutually supplying investment products to each other for retail investors in both Japan and India.

To reflect this strengthened capital relationship, Reliance Asset will be renamed Reliance Nippon Life Asset Management, subject to approvals from relevant authorities.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.