AIA hikes stake in Tata AIA Life to 49%

The value of the transaction is Rs 2,055 crore for the additional 23% stake

AIA Group has increased stake in Tata AIA Life Insurance from 26 per cent from 49 per cent. The insurance company is a joint venture between Tata Sons and  AIA Group. The value of the transaction is Rs 2,055 crore for the additional 23 per cent stake, according to details mentioned in a press release by Foreign Investment Promotion Board (FIPB) for its meeting held on March 7, 2016. This transaction values the insurance company at Rs 8,934.78 crore.

In December 2015, it was announced that AIA Group will hike its stake in Tata AIA Life to 49 per cent. Following receipt of all necessary governmental and regulatory approvals, they have today successfully completed the transaction.

According to provisional data from the Life Insurance Council, Tata AIA Life collected new premiums of Rs 741 crore for financial year 2015-16, showing a growth of 137 per cent. This was the highest growth posted by any insurer in the industry. The insurer is among the top 15 players with respect to new premium collection in the life insurance industry.

The Insurance Laws (Amendment) Act that was passed in 2015 has now allowed foreign direct investment (FDI) of up to 49 per cent in insurance companies in India. Earlier, only 26 per cent FDI was allowed in the insurance sector.

Recent insurance stake sales and company valuations*
Insurer	Valuation (Rs cr)	Insurer	Valuation (Rs cr)
AEGON Life	2,435	Apollo Munich Health Insurance	703
Bharti AXA Life	3,206	Bharti AXA General	1,610
Birla Sun Life Insurance	7,235	Cholamandalam MS General Insurance	6,305
Edelweiss Tokio Life	2,347	HDFC ERGO	4,900
HDFC Life	18,951	ICICI Lombard	17,225
ICICI Prudential Life Insurance	32,500	Max Bupa Health Insurance	830
Reliance Life Insurance	9,847	Tata AIA Life	8,935
* Estimated value based on transaction /deal size for hike in stake