Having already struck a deal with Japan’s Nippon Life Insurance for a 26 per cent stake sale in its life insurance business, Anil Ambani owned Reliance Capital has indicated that it was actively considering making a foray into the banking sector.
In a significant development, the Anil Ambani group, on Friday, received approval from the Reserve Bank of India (RBI) for its proposed 26 per cent stake sale in Reliance Life Insurance to Japan's Nippon Life. The company had signed a definitive agreement to sell a 26 per cent stake in Reliance Life Insurance to Nippon Life Insurance for Rs. 3,062 crore earlier this year. The Insurance Regulatory Development Authority (IRDA) has already granted in-principle approval for the proposed stake sale. Following RBI clearance for the deal, IRDA will now grant final approval for completion of the transaction.
This transaction pegs the total valuation of Reliance Life Insurance at around Rs. 11,500 crore. Nippon Life is a 122-year-old Global Fortune 100 company and the seventh largest life insurer in the world. It is a leading private life insurer in Asia and Japan.
As already indicated by the Reliance Capital chairman, Anil Ambani, this move will help it raise around Rs. 3000 crore that would be used by the company to re-structure its debt.
Similarly, the company is very upbeat about venturing into the banking sector sensing the high growth opportunity it offers. Mr. Ambani, while addressing the annual general meeting (AGM) of Reliance Capital had hinted at company looking for entry into banking sector. “We will evaluate opportunities to enter this high growth sector and are keeping track of all regulatory developments on this front,” he stated.
The company is of the view that under-penetration of financial products and services in India will continue to create immense opportunity for growth. The company plans to expand our asset management group in emerging markets and grow wealth management and private equity business as well.
Reliance Capital is now India's top non-banking finance company with net worth of nearly Rs. 8,000 crore, having over 20 million customers, 8,000-plus offices and a pool of over 18,000 men and women as its human capital.
