UK-based insurer RSA Group is to exit India by selling its entire 26 per cent stake in Royal Sundaram Alliance for Rs450 crore, contrary to expectations that Government's decision of raising FDI ceiling in the sector would prompt foreign partners to raise stake.
The two companies ended their 15-year long partnership and with the RSA quiting the joint venture. Royal Sundaram Alliance Insurance Company will now be a 100 per cent subsidiary of Sundaram Finance and its associates.
Royal Sundaram Alliance was the first private general insurance company, which was granted licence in 2000 following opening up of the sector. It offers motor, health, personal accident, home and travel insurance for individuals and fire, marine, and liability policies for commercial clients.
"Sundaram Finance and RSA Group have reached an agreement whereby RSA has agreed to sell its entire 26 per cent equity stake in Royal Sundaram Alliance Insurance Company to Sundaram Finance for a consideration of Rs450 crore, subject to all regulatory approvals," a statement by Sundaram Finance said.