Reliance Capital, a financial services arm of Anil Dhirubhai Ambani Group, witnessed a rise in share price on Tuesday after Nippon Life Insurance (NLI) announced to increase 23% stake in Reliance Life Insurance for Rs 22.65 billion (USD 348 million).

The company has signed definitive agreements to increase its stake in Reliance Life Insurance from the existing 26% to 49%. The boards of directors of both the companies have approved the increase in stake by the Japanese partner, subject to regulatory approvals.

Nippon Life Insurance, also called Nissay, is one of Japan's leading private life insurer with approx. revenues of Rs 4.01 trillion (USD 61 billion) and profits of over Rs 162 billion (USD 2.5 billion).

The transaction pegs Reliance Life Insurance's valuation at approx. Rs 100 billion (USD 1.5 billion), amongst the highest valuations for any life insurance company in the country. Nippon's investment also represents an implied Embedded Value (EV) multiple of over 3 times for Reliance Life Insurance, the highest for any private insurer in India till date.

In line with the new shareholding structure, the name of the company will also be changed to Reliance Nippon Life Insurance Company.

Shares of Reliance Capital are trading at Rs 419.00, up Rs 10.75, or 2.63% at the Bombay Stock Exchange (BSE) on Tuesday at 2:11 p.m.

The scrip has touched an intra-day high of Rs 422.80 and low of Rs 407.25. The total volume of shares traded at the BSE is 335,641.