Money & Banking

Nippon Life invests Rs 6,000 cr to emerge largest shareholder in Reliance MF

Suresh Iyengar Mumbai | Updated on October 07, 2019 Published on October 07, 2019

Rebrands company as Nippon India Mutual Fund

Japan's Nippon Life Insurance has completed an investment of Rs 6,000 crore in the erstwhile Reliance Mutual Fund to emerge as the single largest shareholder, with 75 per cent stake.

Following this, the Japanese company has renamed Reliance Mutual Fund as Nippon India Mutual Fund and has started the integration of operations with its Global Unified Asset Management business.

NIMF plans to expand its international and alternate business to garner a share of foreign inflows into India, by leveraging Nippon Insurance’s global network.

Sundeep Sikka, CEO, Nippon India Mutual Fund, said the fund house would regain its lost market share, even as it has retained some of its retail investors.

Nearly 50 per cent of flows in the mutual fund business come from metro cities, and 25 per cent from high networth investors. These investors are well informed and are not new to Nippon as a brand, he said.

The company would expand its distribution channels in the tier-II and -III cities, where the fund has lost business, he said.

Nippon India MF would strive to provide a range of products suited to the investors’ need on the debt side of the mutual fund industry, he said.

Along with Nippon, the erstwhile Reliance MF had floated an India focused fund in Japan and mopped up $200 million, taking its overall international asset management business to $2 billion.

Hiroshi Shimizu, President, Nippon Life Insurance Company said the Japanese company had initially invested in the Indian life insurance business in 2011 and the Indian asset management business in 2012.

"We had entered India at the right time, in both the asset management and life insurance businesses, with a long-term vision and the completion of this transaction echoes our commitment to India," he said.

The Indian Asset Management space is quite attractive and has long-term growth potential, with the core management team of Nippon India Mutual Fund being the key driver in the growth story, he said.

Nippon India Mutual Fund acts as an advisor for India focused equity and fixed income funds in Japan (launched by Nissay Asset Management), Korea (launched by Samsung Asset Management) and in Thailand (launched by BBL Asset Management). RNAM also manages offshore funds through its subsidiaries in Singapore and Mauritius, and also has a representative office in Dubai, thereby, catering to investors across Asia, West Asia, the UK, the US, and Europe.

Published on October 07, 2019
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