Edelweiss Tokio Life gets FIPB approval for Tokio Marine to raise stake to 49%

Foreign partner will bring in up to Rs 540 cr with fresh issuance

Edelweiss Tokio Life Insurance has received the Foreign Investment Promotion Board (FIPB)’s approval for increasing its foreign joint venture partner Tokio Marine’s stake in the company from 26 per cent to 49 per cent. This would be through a fresh issuance, said Deepak Mittal, managing director and chief executive officer of Edelweiss Tokio Life.

FIPB stated that additional foreign direct investment through this would be Rs 540 crore. Other regulatory approvals, including that of the Competition Commission of India (CCI) and Insurance Regulatory and Development Authority of India, need to be secured before the stake increase.

Edelweiss Tokio Life is a joint venture between Edelweiss Financial Services and Tokio Marine Holdings Inc. Tokio Marine currently owns 26 per cent in Edelweiss Tokio Life Insurance. Post the agreement, the Indian partner will hold 51 per cent and the foreign partner will hold 49 per cent.

Mittal added that the additional capital will be used for their expansion plans including expanding their reach and into technology investment. "We are committed to build a high quality and well capitalised business with strong support from Tokio Marine in areas like product design and new technology, among others," he added.

The Insurance Act that was passed earlier this year, allowed foreign partners to hike FDI stake up to 49 per cent, with Indian management control. Till now, only AXA has gotten approval from FIPB to raise its stake in the Indian life and general insurance companies.