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The Nippon Life Insurance has paid the entire transaction proceeds of Rs 2,265 crore for additional 23 per cent stake to Reliance Life Insurance. The transaction pegs the valuation of Reliance Life Insurance at approximately Rs 10,000 crore.
“We would like to welcome Nippon Life Insurance as our equal partners in Life Insurance and Asset Management businesses. We have immensely benefitted from our relationship with Nippon Life over the last five years and look forward to further consolidate this partnership in India and abroad with their experience”, said Sam Ghosh, ED and Group CEO, Reliance Capital.
The Japanese company’s investment in Reliance Life Insurance represents implied Embedded Value multiple of over 3 times, the highest in the industry till date.
Nippon Life Insurance is investing a total of Rs 8,630 crore (US$ 1.5 billion) for acquiring 49 per cent stake each in Reliance Life Insurance and Reliance Capital Asset Management.
Reliance Life Insurance recorded a new business premium of Rs 285 crore renewal premium of Rs. 706 crore, total premium (net of reinsurance) of Rs. 986 crore and total funds under management of Rs. 16,038 crore (US$ 2.4 billion) for the quarter ended December 31, 2015.
Nippon Life Insurance is a Global Fortune 500 company that manages over US$ 520 billion or Rs 33.8 Lakh crore in assets - amongst the largest total assets in the world for any life insurer.