IDBI Bank to sell 25% stake in Ageas Federal Life Insurance for Rs 580 cr

IDBI Bank has entered into a share purchase agreement with Ageas Insurance International, wherein the bank is looking to sell its remaining stake of 25 per cent in private sector life insurer Ageas Federal Life Insurance for Rs 580 crore, making Ageas one of the few foreign insurers to raise its stake in its Indian insurance joint venture to 74 per cent, after the government raised the FDI cap in the insurance sector.

“In continuation of the bank’s disclosure dated March 29, 2022, we hereby inform you that IDBI Bank has entered a share purchase agreement (SPA) with Ageas Insurance International NV (Buyer) on May 19, 2022 to sell IDBI Bank’s entire stake of 200,000,000 equity shares in Ageas Federal Life Insurance company pursuant to exercise of call option by Ageas. The transaction will be concluded subject to regulatory approvals,” the bank said in a notification to the exchanges.

The transaction is expected to be completed in Q2FY23, subject to regulatory approvals and satisfaction of the terms and conditions set out in the share purchase agreement.

A European insurer, Ageas, had earlier increased its stake in the Indian insurer to 49 per cent from 26 per cent in December 2020. Federal Bank’s stake continued to be at 26 per cent. Following this, the insurer’s name changed to Ageas Federal Life Insurance from IDBI Federal Life Insurance.

Currently, Ageas Insura­nce International holds 49 per cent stake in the private sector life insurer, Ageas Federal Life Insurance, and Federal Bank holds 26 per cent. After acquiring IDBI Bank’s 25 per cent stake in the insurance company, Ageas Insurance Internati­onal will take its shareholding in the firm to 74 per cent.

Earlier this month, Italian insurer Generali completed its acquisition of 25 per cent stake in Future Generali India Insu­rance, taking its shareholding in the insurer to 74 per cent.

Ageas Insurance Internat­ional and Generali are among the few insurers who have looked to increase their stake to 74 per cent in their Indian insurance joint venture after the Indian government decided to increase the FDI cap in the sector to 74 per cent in the 2021 Budget.

Ageas Federal has earned a net profit of Rs 94 crore in FY22, compared to Rs 119 crore in FY21, registering a 21 per cent drop due to sharp rise in Covid-related death claims.