Reliance Capital has completed the sale of a 26% stake in its life insurance venture Reliance Life to Japan’s Nippon Life for over 3,000 crore, Business-Standard reported.
The entire transaction proceeds of Rs 3,062crore ($680 million) from the Japanese financial services major have been duly received by the company, Reliance Capital said.
The transaction which was announced in March, pegs the total valuation of Reliance Life Insurance at approximately Rs 11,500 crore ($2.6 billion).
After the deal, Reliance Capital which holds 74% stake in Reliance Life.
The deal has received all regulatory approvals required for its completion, said Reliance Capital, the financial services arm of Anil Ambani-led Reliance Group, which has interests in telecom, power, and entertainment and infrastructure businesses, among others.
“Nippon was coming on board as a valued strategic partner in Reliance Life Insurance,” said, Reliance Capital CEO Sam Ghosh, commenting on the development. “Nippon’s vast experience of over 122 years will help strengthen Reliance Life Insurance’s position as a leading and world-class insurance company in India,” Ghosh said.
Nippon Life Insurance President Yoshinobu Tsutsuj also said the Japanese firm was keen to work with Reliance and establish a long-term partnership that is mutually beneficial for both companies.
Nippon Life, also know as Nissay, is the seventh-largest life insurer in the world and the largest private life insurer in Asia and Japan.
It posted revenues of Rs 3,49,834 crore ($80 billion) and a profit of Rs 12,199 crore ($3 billion) for the fiscal year ended March 31,2011. Reliance Life started operations in 2005 after the acquisition of a life insurance company by Reliance Group.
Currently, it is one of the largest insurers in terms of the number of individual policies sold by any of the 23 private life insurers in India.
The company has sold over 7 million policies and managed assets of about Rs 18,000 crore ($4 billion) as of March 31, 2011.
While addressing shareholders last month, Reliance Capital chairman Anil Ambani said the company was in advanced stages of communications for a stake sale in its asset management and mutual fund businesses to Nippon Life as well.
Aiming for the leadership position in the group’s various financial businesses, the billionaire industrialist also announced that Reliance Capital will pursue a banking foray and the entity could be named Reliance Bank.
