Page 15 - Insurance Times July 2019

Nippon Life declares open offer to acquire 22.49% in
Time to take money out
RNAM
of stocks: SBI Life Chief
In an recent announcement, Nippon Life Insurance Company has declared an
"It's time to take some money out of
open offer for about 22.49% stake in Reliance
equities be-
Nippon Life Asset Management (RNAM) for about
cause valua-
3,179 crore. "This open offer is being made by the
tions are look-
acquirer (Nippon Life) to all the public sharehold-
ing stretched,"
ers of the target company to acquire up to 13.82
G o p i k r i s h n a
crore equity shares, constituting 22.49% of the ex-
Shenoy, chief
panded voting share capital... at a price of Rs 230
investment of-
per offer share payable in cash," a draft letter of offer filed with the BSE said.
ficer at SBI Life
Insurance Co., said in an interview. Reliance Capital had declared plans to exit the mutual fund business by selling
"There's no immediate indicator of a its stake in RNAM to its joint venture partner Nippon Life Insurance in May.
return to sound earnings growth and "Both partners currently hold 42.88% each in the company, while the rest is
it will take some time," he said. with public shareholders... The entire proceeds of approximately Rs 6,000 crore
will be utilised to reduce Reliance Capital's outstanding debt by 33 per cent,"
The uncertainty regarding the elec-
Reliance Capital had said.
tion outcome has prompted investors
Binding definitive agreements with Nippon Life Insurance had already been
to shift into shares of top Indian com-
signed by Reliance Capital. RNAM had sold 4.82 crore equity shares through an
panies over the past 18 months from
offer for sale. As per the SEBI guidelines, an open offer by the acquiring com-
their smaller counterparts. During the
pany is crucial to buy equity shares in a target company. Following the open
period, the key S&P BSE Sensex and
offer, Nippon Life will hold a 75% stake in RNAM and will have the right to re-
NSE Nifty 50 indexes rose at least
constitute RNAM's board of directors, including the right to appoint nominee
12%, while the NSE measure of mid-
directors, or to seek the resignation of any director.
sized companies fell by 15% and a
small-cap gauge plunged 29%.
Kerala entrepreneurs to donate insurance policies to
Now the investors are focusing on to
see how the new government man- support fishermen heroes
age to bolster a slowing economy Lakshmi Menon, the co-founder of the Chekutty dolls initiative and Good Karma
and curb a cash crunch which have foundation has said that they have taken an initiative titled, 'Friend Ship', to
led some companies in delaying or support fishermen by connecting them with the mainstream community.
defaulting on interest payments.
The project aims to donate life insurance policies as a token of gratitude to-
SBI Life is hopeful that the earnings wards the community who voluntarily joined the rescue works during the last
at India's top 50 companies will be year's floods. "The campaign aims at a long-term bond between those who
rising at an average of 14% in the volunteer to gift and the recipient families. Those who are willing to make a
financial year that started April 1. gift would be given contacts of the fishermen. They can network with these
The insurance firm has reduced its contacts so that families would have someone to approach at a time of need,"
holding in shares of mid-sized com- said Lakshmi.
panies in its equity funds to 9% from
Through the campaign, one can sponsor a life insurance policy for one fisher-
about 22% in 2017 and does not see
man at just Rs 24 through makefriendship.org. This insurance for a premium
any immediate reason to change the
of Rs 24 per annum, allows insured families to claim up to 1 lakh for death and
balance. "We see a lot of value in
total disability. "Every donation of Rs 24 will be given a do it yourself kit, which
mid-caps, but we won't make a ma-
contains innovative seed paper to make paper boats, a symbolic gesture to com-
jor shift to them, at least for the
memorate the selfless role of the fishermen in last year's floods," said Lakshmi.
time being," Shenoy said.
"Almost a year has passed since the floods. Have we expressed our gratitude?
As of March 31, 2018, SBI Life held
Many may have. However, I have not! I did not incur any direct damages in the
2.1% of India's total 331 million life floods but I remain deeply indebted to these heroes. This is an initiative for
insurance policies, as per the data people who think on the same lines looking for a genuine way to express their
on the insurance regulator's website. gratitude," added Lakshmi.
The Insurance Times, July 2019 15