Nippon Life to buy 26% stake in Reliance Life

[v.r.s.nathan]

Japanese insurance firm Nippon Life Insurance Company will acquire 26 per cent stake in Reliance Life Insurance for USD 680 million (approximately Rs. 3,062 crore).
The transaction pegs the total valuation of Reliance Life Insurance at approximately Rs. 11,500 crore (USD 2.6 billion).
Reliance Capital currently holds a 100 per cent stake in Reliance Life. The holding company has till now invested Rs. 3,000 crore in its life insurance venture.

However, the deal is subjected to approval by insurance regulator IRDA

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[Rahul]

The transaction pegs the total valuation of Reliance Life Insurance at approximately Rs. 11,500 crore (USD 2.6 billion).

Sam Ghosh, CEO, Reliance Capital
Q -The high valuation you got for Reliance Life must have been a pleasant surprise, specially when the private life insurance industry isn’t doing all that well in India.
A - Well, valuation is a matter of debate. There must be a reason why buyers are willing to pay a premium. Nippon Life is a long-term player and so they have taken a long-term view about the Indian market. All our policies have at least a 15-year term. Regulatory changes will happen but, ultimately, there will be growth. One should not bother too much about short-term issues.