Nippon Life increases stake in Reliance Life

Nippon Life Insurance (NLI) signed definitive agreements to increase its stake in Reliance Life Insurance (RLIC), a part of Reliance Capital Ltd. from the existing 26 percent to 49 percent.

“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 percent. 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 Anil D. Ambani, chairman, Reliance Group. The Japanese company will be investing an aggregate value of INR2265 crore (USD348 million) to acquire an additional 23 percent stake in Reliance Life Insurance to reach a 49 percent stake.

The transaction pegs Reliance Life Insurance’s valuation at approximately INR10,000 crore (USD1.5 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 three times for Reliance Life Insurance, the highest for any private insurer in India till date.