Money & Banking

CCI approves Nippon Life's stake increase in Reliance Life

K.R.Srivats | | Updated on: Jan 19, 2018

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The Competition Commission of India (CCI) has given its approval for Nippon Life Insurance to hike its stake in Reliance Life Insurance to 49 percent.

Japan's insurance major Nippon Life had in November 2015 announced plans to increase its stake in Reliance Life Insurance from 26 percent to 49 percent, subject to regulatory approval.

This transaction involved an investment of Rs 2,265 crore ($ 348 million) for additional 23 percent stake to reach 49 percent.

This transaction pegs the valuation of Reliance Life Insurance at about Rs 10,000 crore ($1.5 billion).

Nippon Life's investment represents implied embedded value multiple of over 3 times, the highest in the industry till date.

Also, Nippon Life's investment represents largest Foreign Direct Investment in Indian insurance sector till date.

With this transaction, Nippon Life will have invested a total of Rs 8,630 crore ($1.3 billion) for acquiring 49% stake each in Reliance Capital Asset Management and Reliance Life Insurance.

Srivats.kr@thehindu.co.in

Published on February 11, 2016
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