Anil Ambani-led Reliance Capital on Wednesday announced that it has received in-principle approval from insurance sector regulator Insurance Regulatory Development Authority (IRDA) for its proposed 26% stake sale in Reliance Life Insurance to Japan’s Nippon Life.
“We expect to conclude this transaction within the next few weeks,” said Sam Ghosh, chief executive officer, Reliance Capital. “As strategic partners, we look forward to working closely with Nippon Life to further strengthen Reliance Life Insurance’s position as a world class insurance company in India.”
Earlier this year, Nippon Life, the seventh largest life insurer in the world, had signed an agreement for acquiring a 26% stake in Reliance Life Insurance for Rs3,062 crore.
This transaction pegs the total valuation of Reliance Life Insurance at around Rs11,500 crore.
IRDA would be granting final nod for the proposed sale on receipt of the Reserve Bank of India approval.
Reacting positive to the announcement, the shares of Reliance Capital closed at Rs413, up 11 points or 3% on Bombay Stock Exchange.
The company has sold over 7 million policies through its network of over 1,250 offices and 180,000 advisors. Reliance Life manages assets of Rs18,000 crore as of March 31, 2011.
Transaction is expected to close in next the few weeks.
The company awaits final approval from the Reserve Bank of India.
Privately held Nippon Life, Japan’s largest life insurer by assets, and its rivals are looking to Asia for alliances and acquisitions as their home market shrinks due to an ageing population.