Mumbai: Shares of Reliance Capital rose by nearly 5 percent as Japanese financial services giant Nippon will hike its stake in India's top fund house Reliance Mutual Fund from 26 percent to 49 percent.
The stock ended with a gain of 4.24 percent at Rs 501.45 on the BSE. In intra-day session, it rose by 5 percent to Rs 505.20.
At the NSE, it climbed 4.83 percent to settle at Rs 503.90.
Nippon will hike its stake in Reliance Mutual Fund from 26 percent to 49 percent, while investing Rs 657 crore for the first tranche of nine percent.
The first tranche values Reliance Capital Asset Management Company (RCAM), which runs Reliance MF, at Rs 7,300 crore, as per the deal announced today.
Nippon would eventually up its stake to 49 percent in multiple tranches at prices to be determined on the basis of future prevailing assets and profitability of the company that are expected to be higher than the current levels.
Nippon already holds 26 percent stake in RCAM, which it had acquired for Rs 1,450 crore in 2012 while valuing the company at Rs 5,600 crore at that time.
Nippon Life manages over USD 500 billion (Rs 30 lakh crore) in assets, highest in the world for any life insurer, while RCAM is part of Reliance Capital, the financial services arm of Anil Ambani-led Reliance Group.
RCAM is the largest asset manager in India, in terms of Asset Under Management, managing Rs 2,18,338 crore (USD 36 billion) as on September 30, 2014, across mutual funds, pension funds, managed accounts and offshore funds.
