Nippon to buy 26% stake in Reliance Life
"Nippon Life Insurance will invest an aggregate value of Rs 3,062 crore (USD 680 million) to acquire a 26 per cent strategic stake in Reliance Life Insurance. This is the largest FDI in Indian financial services sector as well as insurance," Reliance Capital CEO Sam Ghosh said on Monday.
The transaction pegs the total valuation of Reliance Life Insurance at approximately Rs 11,500 crore (USD 2.6 billion).
Reliance Capital currently holds a 100 per cent stake in Reliance Life. The holding company has till now invested Rs 3,000 crore in its life insurance venture.
However, the deal is subjected to approval by insurance regulator IRDA and the Japanese regulator, Ghosh added. When asked about the time frame to get approvals,...he said, "We hope it happens as quickly as possible".
Nippon is the 6th largest life insurer in the world and the largest private life insurance company in Japan and Asia.
Commenting on the development, Reliance Capital Chairman Anil Ambani said, "At this time, our thoughts are with the people of Japan, bravely facing an unprecedented natural catastrophe.
"We pray for strength to the country, its people and our new partners and the entire Nippon Life family, to overcome the trauma of the tragic loss of life and devastation caused by this calamity".
Answering queries on Reliance Life's initial public offer plans, Ghosh said, "We will, I think, discuss IPO at a later date. At this point, if you notice 26 per cent, IPO is not a possible option".
As per the current rules, a foreign entity can hold up to 26 per cent stake in an Indian insurance firm. Reliance Capital wholly owns...
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