Nippon Life raises stake in India's Reliance Capital

In the first tranche of the transaction, Nippon will pay INR6.57 billion ($108 million) for a 9% stake. This values Reliance Capital at INR73 billion.

According to a release, the deal represents the largest foreign direct investment in the Indian mutual fund sector to date. Nippon previously paid INR14.5 billion for 26% in the business in 2012, representing a valuation of INR56 billion.

The boards of directors of both companies have approved the stake purchase subject to regulatory approvals. The transaction is expected to be completed before the end of the current financial year. Nippon then has an option to increase its stake to 49%.

Reliance Capital claims to be the largest asset manager in India with INR2.2 trillion under management across private equity,mutual funds, pension funds, managed accounts and offshore funds. Nippon Life has nearly $500 billion under management.

Reliance Capital is a unit of Reliance ADAG Group, which spun out its PE division Reliance Equity Advisors (REA) in July. REA re-branded as Fairwinds Private Equity and launched a new $300 million fund last month.

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• Topics
• South Asia
• North Asia
• Expansion
• India
• Japan
• Reliance Capital
• Growth capital