'Insurance cos can give foreign JV partners call options'
Published on Thu, May 24, 2007 at 08:56 | Source : Moneycontrol.com
Updated at Thu, May 24, 2007 at 12:49
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'Insurance cos can give foreign JV partners call options'
The Finance Ministry does not seem to have a problem with Indian insurers giving an option to their foreign joint venture partners to increase their stake in a company at a pre-fixed price even if it's way lower than the fair value price.
The Finance Ministry does not seem to have a problem with Indian insurers giving an option to their foreign joint venture partners to increase their stake in a company at a pre-fixed price even if it's way lower than the fair value price.
This matter came up last week, when Bajaj announced that it had given Allianz its foreign JV partner the option to raise its stake in their JV to 48% at Rs 5.42 and 16% interest per annum.
This provided the FDI limit is raised from the current 26%. According to the Banking and Insurance Joint Secretary, the government is comfortable with insurance companies getting into such arrangements.
The 
