GMR may invest more in ING Life

GMR Industries which holds 47.15 per cent in ING Vysya Life Insurance is reading itself to invest upto a maximum of Rs 120 crore in the near future if the business requires fresh funds from the shareholders of the company.

The company has announced that it is convening an extraordinary general meeting (EGM) on May 06, 2005 to consider and authorise the Board to make investments in equity shares of ING Vysya Life Insurance on such terms and conditions as stipulated by the Board, which together with existing investments in ING Vysya Life does not exceed Rs 300 crore.

GMR Industries has so far invested close to Rs 180 crore in this venture and if the company gets the nod at the EGM, it will have approval to invest a maximum of Rs 120 crore further. ING holds 26 per cent, ING Vysya Bank another 20 per cent and remaining is held by Eman Group.

A spokesperson for the GMR Group said that the insurance business requires constant investments and takes close to eight years to break even.

"On a frequent basis, there is need for investments from shareholders and this process of getting nod from our shareholders is for that. This EGM is for taking our investment in the company to a possible Rs 300 crore," he noted.

Besides this investment in ING Vysya Life, GMR Group has a nominal stake in ING Vysya Bank in addition to major investments in infrastructure projects such as power, highways and airport.

GMR is parallely looking at exiting the life insurance business when it gets a proper valuation for its stake.

In an earlier interview with Business Standard, GMR chairman G M Rao had said that "their investment in life insurance business is purely financial in nature and will exit if a proper valuation comes."