The Japanese company will be investing an aggregate value of Rs 2,265 crore (US$ 348 million) to acquire an additional 23 per cent stake in Reliance Life Insurance to reach a 49 per cent stake. The transaction pegs Reliance Life Insurance’s valuation at approx. Rs 10,000 crore (US$ 1.5 billion), amongst the highest valuations for any Life Insurance company in the country.
“We are delighted that the outstanding relationship between our two companies has now grown into an equal partnership, with NLI increasing their stake – first, in our asset management business, and now, in our Life Insurance business - to 49 per cent. Life Insurance is one of Reliance Capital’s major businesses, and we believe Nippon Life’s experience of over 125 years will accelerate our growth in this space,” said Anil D. Ambani, Chairman, Reliance Group.
“Ever since our initial investment in 2011, we have developed a mutual understanding and built more than just a financial partnership but an interactive relationship based on solid trust. This additional investment represents not only the past efforts and initiatives, but also the good relationship between both companies going forward, and we are pleased to be able to further strengthen this partnership in various fields. We believe our past and future ties will become a great role model for India - Japan business partnerships”, said Mr. Yoshinobu Tsutsui, President, Nippon Life Insurance.
The Boards of Directors of both the companies - Nippon Life Insurance and Reliance & DSLWDO- have approved the increase in stake by the Japanese partner, subject to regulatory approvals.
The Japanese company will be investing an aggregate value of Rs 2,265 crore (US$ 348 million) to acquire an additional 23 per cent stake in Reliance Life Insurance to reach a 49 per cent stake. The transaction pegs Reliance Life Insurance’s valuation at approx. Rs 10,000 crore (US$ 1.5 billion), amongst the highest valuations for any Life Insurance company in the country.
Nippon Life Insurance’s investment also represents an implied Embedded Value (EV) multiple of over 3 times for Reliance Life Insurance, the highest for any private insurer in India till date.
Nippon Life Insurance would have invested an aggregate of Rs 5,327 crore (US$ 819 million) for acquiring 49 per cent take in Reliance Life Insurance with this transaction. NLI has also committed an investment of Rs 3,303 crore (US$ 508 million) for acquiring 49 per cent stake in Reliance Capital Asset Management, thereby taking its total investment to Rs. 8,630 crore (US$ 1.3 billion), the largest FDI in the financial services sector.
In line with the new shareholding structure, the name of the company will also be changed to Reliance Nippon Life Insurance Company Limited.
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