Moneycontrol

Budget 2023Budget 2023

PARTNERS

  • Tata AIA Life Insurance
  • Hafele
  • Motilal Oswal
  • SMC Global Securities Limited
Upcoming Event : LeapToUnicorn - mentoring, networking and fundraising for startups. Register now
Budget 2023
Budget 2023
you are here: HomeNewsBusiness

Had to reduce ownership in ICICI Lombard due to regulations: Prem Watsa spells reasons for lowering stake in letter to shareholders

ICICI Lombard was listed on the stock exchanges in September 2017

April 02, 2018 / 10:36 AM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

The listing of ICICI Lombard General Insurance and the reduction of their foreign partner FairFax Holdings' stake in the entity was a surprise announcement for the industry. However, in an annual letter to the shareholders, Fairfax Financial Holdings’ Chairman Prem Watsa said that they had to reduce their ownership due to regulatory norms.

The insurance company was a joint venture between ICICI Bank and Fairfax. It is the largest private sector general insurer.

Watsa explained in his letter that given, property and casualty insurance being the company’s core business, its optimism in the Indian growth story and the fructifying partnership ICICI Lombard, Fairfax increased its shareholding to 35 percent. This move was made immediately after the government allowing 49 percent of foreign ownership in the sector in 2015.

However, he added that ICICI Lombard intended to open a new chapter in their journey, by going public. With this move, the promoter, ICICI Bank wanted to control at least 55 per cent ownership and the Indian Law requiring public participation to be at least 25 percent of a listed entity, Fairfax had to reduce its ownership to a mere 20 percent.