Within minutes of Parliament approving higher foreign investment in insurance sector, a number of insurers including from Bharti, Reliance, Max and SBI groups said their overseas partners will raise their stakes in respective JVs to 49 percent.
Welcoming the hike from 26 percent to 49 percent, the companies said their foreign partners were keen on a larger equity participation and the move would help attract USD 8-10 billion capital into the industry.
Bharti Group Chairman Sunil Bharti Mittal said "this is a positive development which will bring the much-needed investments for the growth of the insurance industry." Mittal said France's Axa will "step up their equity investment to 49 percent.
Bharti will soon move the application to FIPB as per the new FDI guideline". "This is a huge positive and is expected to bring in USD 8-10 billion capital in the industry which will in turn help the industry to significantly improve insurance penetration in the country.
"We will be initiating dialogue with our partners in life insurance for increasing their stake and also hope to close the partners for our General insurance and health insurance businesses soon," Reliance Capital CEO Sam Ghosh told PTI.
SBI Life MD and CEO Arijit Basu said "there is clarity and uncertainty is over... We are happy about it". SBI Life, which is a 74:26 joint venture of State Bank of India and BNP Paribas Cardiff, is in talks with the foreign partner for raising the stake.
"They are interested in hiking the stake.. How much and when it happens will depend on discussions," he said. Max India Chairman Analjit Singh and HDFC Life MD and CEO Amitabh Chaudhry also said the move will bring in more foreign capital in the near future.
Singh said its JV partner in health insurance venture UK- based Bupa is willing to hike stake in the company and a proposal in this regard is pending with the FIPB. As regards Max Life Insurance, Singh said, "Lots of conversation is going on with multiple partners. If Mitsui wants to raise stake, that Mitsui's call".
Parliament tonight approved the long-pending Insurance Bill that provides for raising foreign investment cap to 49 percent in the sector. The controversial Insurance Laws (Amendment) Bill, 2015, which replaced an ordinance promulgated in December last, was passed by voice vote.
Financial Services Secretary Hasmukh Adhia said: "The insurance sector in India will get a big boost because of passing of the insurance legislation in the Parliament on Thursday".
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