The robust growth in MF AUM is driven by sustained net equity inflow and a big rally in equity markets
The deal is the largest overseas acquisition by a Japanese insurer to date and the second major transaction announced by Nippon Life this year.
Nippon Life AMC is racing ahead of other AMCs on strong growth in AUM
The profit of AMCs may not grow in tandem with AUM growth as passive assets keep rising.
Sources said Nippon Life stake would have been diluted to below 10 per cent following merger and Japanese firm is believed to be not comfortable with the idea of losing all the shareholder and the governance rights.
Nippon Life, which is a 49 percent partner in Reliance Nippon Life Insurance Company (RNLIC), may consider a merger between Reliance Nippon Life and Birla Sun Life Insurance, a part of Aditya Birla Capital.
In the event of an employee’s demise, COVID-19 related or otherwise, NAM has promised several measures to help the impacted family both in terms of financial as well as emotional support.
A good company will always attract quality investors
In this edition of Ideas for Profit, Moneycontrol's Sakshi Batra discusses two AMC stocks HDFC AMC and Nippon life to see if these warrant investors' attention?
The immediate supports are now placed at 12,050 – 11,980 and on the higher side, we saw some breather around 12,150.
The company will continue to operate without any change in structure and management
Most analysts believe the stake sale will happen at a premium to the current market price
Reliance Capital, which has completed five years of partnership with Nippon Life, said it plans to strengthen the association with more products in mutual fund and life insurance spaces going ahead
Nippon Life Insurance now becomes a co-sponsor of Reliance Mutual Fund, along with Reliance Capital, following which the name of fund house would be changed to Reliance Nippon Life Asset Management.
Once the deal is complete, Nippon Life Insurance would have 49 percent stake in the company, the maximum ownership allowed for a foreign player in a domestic private insurer.
Financial sector conglomerate Reliance Capital today reported 10.3 per cent rise in net profit at Rs 235 crore for the third quarter of 2015-16, helped by growth in mutual fund and broking business.
The company would like to keep the debt to equity ratio at 1.8, said Sam Ghosh, ED & Group CEO, Reliance Capital.
The lender tabled the moves in posting a 19.7 percent lift in annual net profit to 6.34 billion dollar (USD 4.56 billion) for the year to August 31 as it looks to bolster its balance sheet and provide a buffer to meet tougher regulatory requirements.
The fund raised through the deal with Nippon Life would be used to grow NBFC business and reduce debt, said Sam Ghosh, CEO, Reliance Capital.
This pegs the valuation of RCAM, which runs Reliance Mutual Fund and is part of Anil Ambani -led conglomerate Reliance Group's financial services arm Reliance Capital, at Rs 8,542 crore or USD 1.3 billion.
In Reliance Life, Nippon plans to hike the stake from 26 percent to 49 percent, while it would increase its holding in Reliance Capital Asset Management Company from 35 percent to 49 percent.
Reliance Anil Dhirubhai Ambani Group (ADAG) on Thursday announced a strategic alliance with Sumitomo Mitsui Trust Bank in which the Japanese bank would pick up 2.77 percent stake in Reliance Capital
Leo Puri, the MD of UTI Asset Management says "It is a clear vote of confidence in the outlook and the medium to long-term outlook for the asset management industry. A Japanese interest in India at the moment, I would say is a sign perhaps for many Indian entrepreneurs who set up these companies."
P Phani Sekhar of Angel Broking and Nipun Mehta of Blue Ocean Capital Advisors believe it is the right time to buy the stock.
The deal ups the valuation of Reliance Cap to around Rs 7,300 crore or USD 1.2 billion.