The Foreign Investment Promotion Board has granted approval to Nippon Life Insurance (NLI) for increasing its stake in Reliance Life Insurance (RLI), a part of Reliance Capital, to 49 per cent.

Nippon Life Insurance has already secured approval from the Competition Commission of India (CCI) and the transaction is now expected to be completed in the next few days.

Nippon Life Insurance will be investing an aggregate value of Rs 2,265 crore ($348 million) to acquire an additional 23 per cent stake in Reliance Life Insurance to acquire 49 per cent stake.

In line with the new shareholding structure, the name of the company will also be changed to Reliance Nippon Life Insurance Company, post increase in stake.

The transaction pegs Reliance Life Insurance’s valuation at around Rs 10,000 crore ($1.5 billion), among the highest valuation for any life insurance company in the country.

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

Nippon Life Insurance would have invested a total of Rs 8,630 crore ($ 1.3 billion) for acquiring 49 per cent each in Reliance Life Insurance and Reliance Capital Asset Management with this transaction.

Reliance Life Insurance is among the leading private sector life insurance companies in terms of new business premium.

The company recorded a new business premium of Rs 285 crore ($43 million), renewal premium of Rs 706 crore ($107 million), total premium (net of reinsurance) of Rs 986 crore ($149 million) and total funds under management of Rs 16,038 crore ($2.4 billion) for the quarter ended December 31, 2015.

Nippon Life Insurance is an over 125-year-old insurer and a Global Fortune 500 company that manages over $520 billion (Rs 33.8 lakh crore) in assets - among the largest total assets in the world for any life insurer. The company is one of the largest life insurers in the world.

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