Nippon to hike stake to 49% Reliance Life for Rs 2,500 crore

Japan's Nippon Life Insurance plans to acquire another 23% stake in Reliance Life Insurance for about Rs 2,500 crore.

Nippon's stake in the company, when the deal comes through, will increase to 49% - the upper limit for a foreign player in the private sector insurance firm.

Sources said it has agreed to pay Rs 2,500 crore for the additional stake acquisition, putting Reliance Life Insurance's valuation at around Rs 11,000 crore.

"The due diligence process is complete and final documents for the deal are being drawn up. The deal is expected to be announced in next 2 to 3 weeks," the sources added.

When contacted, Reliance Life Insurance spokesperson declined to comment on the issue.

In March 2011, Nippon Life had picked up 26% stake in the life insurance venture under Reliance Capital for Rs 3,062 crore.

The planned deal will reduce Reliance Capital's stake in Reliance Life Insurance to 51% from 74%.

It will also make Nippon Life one of the largest Japanese investors in India, with total investment of Rs 8,865 crore in the Anil Ambani-led Reliance Group.

So far, Nippon has invested Rs 6,365 crore in two Reliance Group companies.

Earlier this month, Nippon Life agreed to acquire a 14% stake in Reliance Capital Asset Management for Rs 1,196 crore to increase its stake to 49%.

The Japanese company will invest an aggregate value of Rs 1,196 crore to acquire an additional 14% stake in Reliance Capital Asset Management, in tranches, to reach a 49% stake.

The transaction pegs Reliance Capital Asset Management's valuation at Rs 8,542 crore, the highest valuation till date for any asset management company in the country.