Reliance Capital gets Sebi nod to sell asset arm stake to Nippon Life

Reliance Capital has got an approval from the Security and Exchange Board of India (Sebi) to sell 26 per cent stake in its mutual fund business, Reliance Capital Asset Management (RCAM), for Rs 1,450 crore to Japan-based Nippon Life Insurance.

The Reserve Bank of India (RBI), the Competition Commission of India (CCI) and the Pension Fund Regulatory and Development Authority (PFRDA) have already approved the proposed stake sale.

The company said it had also received approval of the Monetary Authority of Singapore (MAS) for the purpose.

"Nippon Life will invest an aggregate value of Rs 1,450 crore ($290 million) to acquire 26 per cent strategic stake in Reliance Capital. The transaction pegs the total valuation of Reliance Capital at approximately Rs 5,600 crore ($1.1 billion)," the company said in a statement.

The transaction is expected to close in next few weeks.

"We are delighted to get these approvals, and are thankful to the regulators for their support," said Sam Ghosh, chief executive officer, Reliance Capital.

Reliance Capital had signed final agreements with Nippon Life for the stake sell in March this year. The deal was the largest ever Foreign Direct Investment (FDI) in the Indian mutual fund space.

RCAM is the largest and most profitable asset management company in India in terms of AUM (asset under management), managing approximately Rs 1,40,000 crore ($28 billion) across mutual funds, government-sponsored public funds, managed accounts and hedge funds.

Nippon Life is a 122-year Fortune 100 company and manages over $600 billion in assets. It is the seventh largest life insurer globally and the largest private insurer in Asia.

Reliance Capital has already completed another deal with Nippon Life, wherein the Japanese company has acquired 26 per cent stake in Reliance Life Insurance for Rs 3,100 crore, valuing the life insurance venture at about Rs 11,500 crore.