Reliance Capital Ltd. told the stock exchanges today that it has invited Nippon Life Insurance Company to buy up to 42.88 percent of its stake in Reliance Nippon Life Asset Management Ltd.—the asset manager in which both the companies are partner-promoters.
At current valuations, Reliance Capital can raise over Rs 4,000 crore if the entire stake gets sold, helping the Anil Ambani-chaired company pare debt. Both the companies hold 42.88 percent stake each in the asset manager.
The move comes a day after the Supreme Court found Ambani guilty of contempt for not paying dues of over Rs 450 crore to Ericsson AB, and said that he will face a jail term if he fails to comply.
Reliance Nippon Life's initial public offering—a mix of fresh issue and offer for sale by Reliance Capital—hit the exchanges in October 2017, in which shares were priced at Rs 252 apiece. The shares—which have declined nearly 31 percent this year—are currently trading at a discount of 26.5 percent to the IPO price, according to Bloomberg.
Reliance Capital's consolidated net worth is Rs 16,605 crore and has a net debt-equity ratio of 2.48 as of March 31 last year according to its annual report filings.
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