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Business deals

Nippon Life to take control of India's 5th-largest asset manager

Japan insurer nears deal $640m with debt-laden partner Reliance Capital

The Bombay Stock Exchange building in Mumbai. India's mutual fund market is growing.   © Reuters

TOKYO -- Nippon Life Insurance is in talks to raise its investment in an Indian asset management affiliate, seeking to capture more of a growing local market.

Japan's biggest life insurance company looks to spend roughly 70 billion yen ($639 million) to acquire most of partner Reliance Capital's 43% interest in Reliance Nippon Life Asset Management, bringing its own stake to more than 70%.

Reliance Nippon Life is India's fifth-largest asset manager, with 4.2 trillion rupees ($59.6 billion) in assets under management. It offers mutual funds for retail investors and handles larger accounts such as pension funds. Nippon Life bought into the company in 2012 and has gradually raised its stake, which is now the same size as Reliance Capital's.

Reliance Nippon Life's assets under management have tripled since Nippon Life became a shareholder, and its net profit rose 7% to 486 billion rupees last fiscal year. India's mutual fund market has grown steadily, thanks to the country's large population and economic development.

But Reliance Capital, part of Anil Ambani's Reliance Group, is looking to sell the asset manager, along with a nonlife insurance subsidiary, to pay down mounting debt that has dragged down its credit rating. The company's liabilities came to 200 billion rupees at the end of March.

The unlisted Nippon Life will seek to ensure the asset manager's finances remain stable and plans to look for a different Indian partner to take Reliance Group's place.

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