Financial services group Religare on Tuesday announced its exit from life insurance business, while the foreign partner Netherlands-based Aegon has decided to hike its stake to 49 per cent in their joint venture.
Set up in 2008, Aegon Religare life Insurance Company currently has three partners -- Religare Enterprises (44 per cent), Bennett Coleman and Company ltd or The Times of India Group (30 per cent) and Aegon (26 per cent).
Under a definitive agreement announced by Religare Enterprises, it will sell its entire holding to BCCl, while Aegon would eventually hike its stake to 49 per cent. The transaction is subject to necessary and appropriate regulatory approvals of CCI, FIPB and IRDA, Religare said in a filing to the BSE.
With this proposed deal, the foreign partner would have 49 per cent stake, the cap fixed in the sector by Parliament in March. It passed the Insurance laws (Amendment) Bill, 2015 which seeks to increase foreign investment in private sector companies to 49 per cent from the existing 26 per cent, among other things.
Many foreign partners of both life an non-life insurance companies have announced raising their stake to 49 per cent. Some of them are in the process of seeking various regulatory approval.
Foreign partners of companies like Max Bupa, SBI General have already announced their intent to raise their stake in the joint venture. Recently, the Government approved French insurance firm AXA raising stake in its life insurance JV with Bharti Group to 49 per cent for Rs858.6 crore.
The French firm has also been permitted to raise stake in the general insurance joint venture with Bharti. This will entail capital flow of Rs431.40 crore. Together, AXA's FDI in Bharti group will be worth Rs1,290 crore. More foreign partners are expected come forward and raise stake in the Indian insurance business.