Mumbai: Japan’s largest insurer Nippon Life Insurance is in talks with Reliance Life Insurance to buy 26 per cent stake in the company for $724 million, reports Economic Times. Among the private life insurers, only Reliance Life has 100 per cent Indian ownership.
The Economic Times report says the two have been in talks for more than six months but the deal failed to close earlier because of valuation issues. The current insurance law permits only 26 per cent foreign investment in Indian companies.
Last year, Reliance Life Insurance was reportedly in talks with other two insurers Swiss Life and China Life for a foreign partner but the deal didn’t get finalized.
Reliance Life has been planning to divest its stake through a public offer but has had to postpone it as the current norms require an insurer to have 10 years of operation, a condition that Reliance did not fulfill.
An insurance amendment bill is to be taken by the government which would raise the FDI limit in Indian insurance companies to 49 per cent.