Japan’s insurance major Nippon Life Insurance announced its plans to invest in Indian markets . The company acquired 23% of Reliance Life insurance for about Rs2,265 crores. With this acquisition company now holds 49% of the Indian insurance arm. This is the upper limit defined by the Indian government for a foreign player to Invest in an Indian Insurance firm.
The acquisition comes at time when the insurance sector around the world is reeling under stiff economic pressure. Reliance managed a strong valuation of Rs10000 crore with highest EV(Embedded Value) among its peers. The total investment of Nippon after this deal has raised to Rs 8,630 crore in Reliance Life Insurance cooperation.
Reliance group chairman Mr Anil Ambani said “We are delighted that the outstanding relationship between our two companies has now grown into an equal partnership, with Nippon increasing their stake – first, in our asset management business, and now, in our Life Insurance business – to 49 per cent.”Both the boards have approved the deal and it would materialize post regulatory approval
“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,” Yoshinobu Tsutsui, president, Nippon Life Insurance said.
Nippon first entered the Indian insurance foray with a 26 % stake in Reliance Life Insurance at 3,602 Crore in March 2011.
Nippon has also agreed to invest in Reliance capital asset management. The company has planned to acquire 14% stake at Rs1,196 Crores.