New Delhi, Feb 2 (IANS): Fair trade watchdog Competition Commission of India Monday approved Japanese financial services major Nippon’s proposed deal to raise its stake in Reliance Mutual Fund to 49 per cent in multiple tranches.

The proposed deal would “neither result in the elimination of a competitor, nor alter the structure of market for mutual funds, asset management services and portfolio management services“, the regulator said in its order here.

Nippon currently holds 26 percent stake in the Reliance MF parent Reliance Capital Asset Management Ltd (RCAM) which it acquired for Rs.1,450 crore in 2012 while valuing the company at Rs.5,600 crore.

Under the proposed deal, Nippon Life Insurance Company would first acquire 9 per cent additional stake of RCAM for around Rs.657 crore.

Nippon will also have the option to hike its stake to 49 percent in multiple tranches at prices to be determined on future prevailing assets and profitability of the company.

RCAM runs Reliance MF and is part of the Anil Ambani-led Reliance Group’s financial services arm, Reliance Capital.

“It is noted that the acquirer (Nippon) and the target enterprise (RCAM) are engaged in similar services, that is asset management services and portfolio management services,” the CCI order said.

“However, it is observed that the acquirer does not provide the said services in India, except through the Target Enterprise and, therefore, there is no horizontal overlap between the services provided by the Acquirer and the Target Enterprise in India,” it added.

RCAM is India's largest asset manager in terms of Asset Under Management, managing Rs.2,18,338 crore ($36 billion) as on Sep 30, 2014, across mutual funds, pension funds, managed accounts and offshore funds.

Nippon Life manages over $500 billion in assets, which is the highest in the world for any life insurer.