Thaindian News

Mumbai, Jan 19 (IANS) Anil Ambani-led Reliance Capital Thursday said Japan’s largest private life insurer Nippon Life will acquire a 26 percent stake in the group’s asset management company for $290 million, taking the overall valuation to $1.1 billion.

The company also said this will be the largest foreign direct investment to date in India’s mutual fund industry and that the conclusion of the transaction was subject to regulatory approvals.

A pact to that effect was signed by chairman Anil Ambani, on behalf of Reliance Capital Asset Management Company, and Yoshinobu Tsutsui, president of Nippon Life, the 122-year-old Fortune 500 company that has some $600 billion in assets under management.

Nippon Life last year bought 26 percent stake in Reliance Life, the life insurance arm of Reliance Capital for $680 million, valuing the company at $2.6 billion.

“We are delighted to have Nippon as our strategic partners in mutual fund business. They are already our partners in the life insurance business,” Ambani said in a statement.

“The mutual fund partnership cements and strengthens the relationship between Reliance Group and Nippon Life further and takes it to a new level,” he added.

Following the, deal Reliance Capital share price surged 4.53 percent to Rs.332.25 at the Bombay Stock Exchange in afternoon session Thursday.

Nippon Life Insurance, also called Nissay, said the deal was strategic and it would further strengthen its relationship with Reliance Group.

“Through this investment, we believe that we can strengthen our business relationship with Reliance Group which has high reputation and reliability in India,” said Tsutsui.