UAE Funds Said To Be In Fray For Indian Investment Firm Deal

Investment Corporation of Dubai (ICD) and Abu Dhabi Investment Authority (ADIA) are among overseas funds which are in the fray to acquire India-based Reliance Capital’s stake in Reliance Nippon Life Asset Management Ltd, its joint venture with Japanese Nippon Life.

Reliance Nippon Life AMC is the third largest investment management company by profit in India.

Sources close to Reliance Capital told Arabian Business that both ICD and ADIA have directly approached Reliance Capital, the financial sector company of the Reliance Anil Dhirubhai Ambani Group, to acquire the latter’s stake in Reliance Nippon Life AMC.

Sources said Reliance Capital is hoping to raise about $1 billion from the stake sale in the AMC.

Both Reliance Capital and Nippon Life hold 42.88 percent stake each in the joint venture, which has $11.95 billion assets under management (AuM) currently.

Reliance Capital Life was trading on the Indian bourse at $2.80 a share, making the total valuation of the Reliance Capital's stake in the JV at $734 million.

Sources, however, said the company would demand a premium for its stake since “it will be a sole-control transaction".

When contacted, the Reliance Capital official spokesman declined to comment on ICD and ADAI approaching it for the company’s stake in the JV with Nippon Life.

When contacted, the Abu Dhabi Investment Authority spokesman told Arabian Business that the company has no comment to offer on the issue.

Reliance Nippon Life AMC is the asset manager to manage all mega India government employee provident fund and pension funds such as the EPFO (Employee Provident Fund Organisation), PFRDA (Home-Pension Fund Regulatory and Development Authority), CMPFO (Coal Mines Provident Fund Organisation) and ESIC (Employees’ State Insurance Corporation).

The financially troubled Anil Ambani group has put on the block its stake in its JV with Nippon Life Insurance to raise funds to pay off part of Reliance Capital’s approximately $2.54 billion debt. It has indicated that it hopes to wipe off 40 percent of its debt through the stake sale.