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December 11 2019
How will Nippon light up Rel Cap's future?
19 January 2012

Anil Ambani's plans to rid his group companies of debt have taken one step forward. Japan's Nippon Life Insurance will pick up a 26% stake in Reliance Capital Asset Management for Rs 1,450 crore. CNBC-TV18's Varinder Bansal and Ashmit Kumar analyse the details.

The Indian asset management space has stoked the interest of foreign players and Anil Ambani has made hay while the sun shines.

This deal values the company at Rs 5,600 crore. However, that's not the surprising part. What is, is that in terms of percentage of assets under management (AUM), this is a landmark deal. Historically, deals in the asset management space have been struck anywhere between 2.5-5.5% of assets under management. However, this deal is pegged at 7% of assets under management.

Coming soon after a 26% stake sale in Reliance Life Insurance to Nippon Life, this deal will help Anil Ambani go one step further in his long-standing plan of reducing debt.

With this, total debt is expected to come down to nearly Rs 15,000 crore, and with two deals, nearly Rs 5,000 crore debt has been retired. The deal definitely caught investors' fancy as  Reliance Capital ended the day over 3% higher.

 

 

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