Money & Banking

CCI clears Nippon Life stake hike in RNAM up to 75%

KR Srivats New Delhi | Updated on July 21, 2019 Published on July 21, 2019

Anil Ambani, Chairman, ADAG   -  BL

RCap eyes ₹6,000 cr by offloading stake in Reliance Nippon Life Asset Management

The Competition Commission of India (CCI) has given its nod for Japanese life insurance major Nippon Life Insurance to raise its stake up to 75 per cent in Reliance Nippon Life Asset Management (RNAM).

This approval clears the legal decks for Nippon Life to launch a mandatory open offer to public shareholders of RNAM to acquire up to 25.33 per cent stake in RNAM’s expanded voting share capital. SEBI recently issued its final observation letter paving the way for the mandatory open offer to public shareholders.

Nippon Life’s open offer — from July 23 to August 5 — is for acquisition of up to 15.57 crore equity shares, being 25.33 per cent of RNAM’s expanded voting share capital, at an offer price of ₹230 a share.

“@CCI India approves acquisition of up to 75 per cent stake in Reliance Nippon Life Asset Management Ltd by Nippon Life Insurance Company”, the CCI tweeted. It may be recalled that the Japanese firm had reached a definitive agreement with Reliance Capital (RCap) in May to hike its shareholding in RNAM from 42.88 per cent to 75 per cent by buying shares from public shareholders and RCap.

Depending on the shares tendered in the open offer, Nippon will acquire RCap stake to take its shareholding to 75 per cent, the maximum permissible promoter shareholding limit in a listed entity, and become the sole promoter.

Under the definitive agreement, RCap had declared its intent to offload entire stake in RNAM. Prior to the definitive agreement announcement, both Nippon Life and RCap held 42.88 per cent stake each in RNAM and public shareholding was 14.6 per cent.

RCap is looking to mop up ₹6,000 crore by selling its shareholding in RNAM. Indications are that the entire Nippon Life transaction with RCap will close by end August.

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Published on July 21, 2019
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