Nippon will invest Rs. 657 crore in the current financial year to acquire an additional 9% stake in Reliance Capital.
Japanese life insurer Nippon Life is set to increase its stake in Reliance Capital Asset Management (RCAM) to 35%, says a company press release. Currently, Nippon holds 26% stake in RCAM.
The company will invest Rs. 657 crore in the current financial year to acquire an additional 9% in RCAM. The Japanese insurer can increase its stake to 49%, subject to necessary regulatory approvals. However, it will take nearly 2 years to reach this limit due to compliance issues.
In the press release, Sundeep Sikka said, “The company has reached a definitive agreement with Reliance Capital for raising Nippon Life’s ownership in Reliance Asset Management. After the mentioned additional purchase, we will be increasing the number of board of directors Nippon Life can nominate and recommend in proportion to our ownership. We will continue to rigorously promote business collaboration between Nippon Life Group and Reliance Asset and strengthen this collaboration further as it eventually develops into an equal partnership – in line with the proportion of our ownership reaching 49%.”
Sikka said that the company is planning to expand its footprint globally.
RCAM is one of the largest asset managers in India managing Rs. 2.18 lakh crore crore (US$ 36.0 billion) as on September 30, 2014, across mutual funds, pension funds, managed accounts and offshore funds, said the press release.
Reliance Mutual Fund has AUM of Rs. 1.22 lakh crore as on September 2014. The company has registered a profit of Rs.304 crore in FY 2013-14, up 54% compared to Rs. 198 crore in FY 2012-13.
