Nippon Life to increase stake in Indian asset management venture

28, May. 2019

NEW DELHI, NNA – Nippon Life Insurance Co. of Japan says it will raise its holdings in an Indian asset management firm to tap the growing market there for mutual funds.

The company said it will spend 45.2 billion rupees ($651 million) to buy an additional 32.125 percent of Reliance Nippon Life Asset Management Ltd. through a purchase from its partner, Reliance Capital Ltd., as well through tender, raising its stake from 43 percent to 75 percent by October.

Press reports said Reliance Capital is selling its entire 43 percent stake in the joint venture to Nippon Life and other investors to pay down the debt.

The Indian partner said in a statement that it expects to receive about 60 billion rupees and use it to reduce outstanding debt by 33 percent

Nippon Life is Japan’s largest life insurer by assets. It first invested in the Indian firm in 2012 to jointly sell mutual funds, the company said in a statement on Thursday.

Investment trust assets under management by Reliance Nippon stood at 2.3 trillion rupees at the end of March, the fifth largest in India, with a market share of 9.5 percent.

In the tender this month through September, Nippon Life will offer 230 rupees per share, a 5.5 percent premium on the minimum 60-day price as specified by the Securities and Exchanges Board of India takeover regulations, Reliance Capital said.