Japanese insurer Tokio Marine will hike its stake to 49 per cent in its life insurance joint venture with Edelweiss Group and is expected to infuse around Rs 500 crore in additional capital.
Tokio Marine Holdings Inc, which owns 26 per cent in Edelweiss-Tokio Life, today became the fourth overseas firm after the English major Bupa in Max, the French financial powerhouse Axa in Bharti's life venture and the Dutch firm Aegon in Religare, to announce its decision to increase the stake in domestic partner to 49 per cent.
Tokio Marine has filed an application with the Foreign Investment Promotion Board for hiking the stake to 49 per cent in Edelweiss-Tokio Life, BSE was informed today.
"Tokio's decision to hike its stake to 49 per cent from 26 per cent in Edelweiss-Tokio Life will strengthen our relationship. The company is likely to get a capital infusion of Rs 400-500 crore. We expect the fund flow over next three four months," Edelweiss Group Chairman and Chief Executive Rashesh Shah told PTI.
"While forming the company three years ago, we had in principle agreed to take this life insurance venture to 51:49 level as and when the law permits it and we are happy that the new Insurance Act has allowed it to happen now," Shah added.
Many companies have started the process of diluting stake in favour of their foreign partner as Parliament in March passed the new insurance law that allows up to 49 per cent FDI in the sector from the existing 26 per cent.
According to the data collated by the Life Insurance Council, premium income of Edelweiss-Tokio Life grew 52.56 percent to Rs 122.64 crore in 2015 fiscal from Rs 80.39 crore the previous fiscal, even though the number of its policies dipped 11.38 per cent to 29,243 from 32,999 a year ago.
The Edelweiss-Tokio started operations in 2011 and has 59 branches across 49 cities.
