Nippon Life Increases Stake In Reliance Life Insurance To 49 Percent

Nippon Life Insurance (NLI), a Fortune 500 company and one of the largest life insurers in the world, has signed definitive agreements to increase its stake in Reliance Life Insurance (RLIC), a part of Reliance Capital Ltd. from the existing 26 per cent to 49 per cent.

“We are delighted that the outstanding relationship between our two companies has now grown into an equal partnership, with NLI increasing their stake – first, in our asset management business, and now, in our Life Insurance business - to 49 per cent. Life Insurance is one of Reliance Capital’s major businesses, and we believe Nippon Life’s experience of over 125 years will accelerate our growth in this space,” said Mr. Anil D. Ambani, Chairman, Reliance Group.

“Ever since our initial investment in 2011, we have developed a mutual understanding and built more than just a financial partnership but an interactive relationship based on solid trust. This additional investment represents not only the past efforts and initiatives, but also the good relationship between both companies going forward, and we are pleased to be able to further strengthen this partnership in various fields. We believe our past and future ties will become a great role model for India - Japan business partnerships”, said Yoshinobu Tsutsui, President, Nippon Life Insurance.

The Boards of Directors of both the companies - Nippon Life Insurance and Reliance Capital - have approved the increase in stake by the Japanese partner, subject to regulatory approvals. The Japanese company will be investing an aggregate value of US$ 348 million to acquire an additional 23 per cent stake in Reliance Life Insurance to reach a 49 per cent stake.

The transaction pegs Reliance Life Insurance’s valuation at approximately US$ 1.5 billion, amongst the highest valuations for any Life Insurance company in the country. Nippon Life Insurance’s investment also represents an implied Embedded Value (EV) multiple of over 3 times for Reliance Life Insurance, the highest for any private insurer in India till date.

This transaction is expected to be completed within the current financial year, subject to receipt of regulatory approvals.

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