Germany-based ERGO Insurance Group will hike its stake from 25.84 per cent in HDFC ERGO General Insurance to 48.74 per cent. In a joint statement, Housing Development Finance Corporation Limited (HDFC) and ERGO said the foreign partner would pay Rs 1,122 crore for the additional stake (22.9 per cent), valuing the insurer at Rs 4,900 crore. Post this transaction, HDFC's stake in the general insurance venture will come down from 73.63 per cent to 50.73 per cent.
The statement said HDFC ERGO remains a subsidiary of the corporation. This transaction is subject to receipt of all necessary approvals, including from the Insurance Regulatory & Development Authority of India (Irdai), the Competition Commission of India and the Foreign Investment Promotion Board.
HDFC ERGO is among the few general insurance companies, where the foreign partner has decided to hike their stake. New norms under the Insurance Laws (Amendment) Act have allowed foreign partners in insurance companies to hold up to 49 per cent stake from 26 per cent stake allowed earlier.
For quarter ended September 30, 2015, the insurer's profit after tax jumped to Rs 43.59 crore from Rs 27.03 crore posted in the same quarter previous financial year. Its net earned premium stood at Rs 416 crore for this period in FY16 compared to Rs 425.3 crore in the same quarter last financial year.
This deal makes HDFC ERGO one of the top valued general insurers in India. In October 2015, Fairfax Financial Holdings had decided to increase its stake in ICICI Lombard General Insurance to 35 per cent approximately from 25.7 per cent held currently. This deal had valued the company at Rs 17,225 crore.
The statement said HDFC ERGO remains a subsidiary of the corporation. This transaction is subject to receipt of all necessary approvals, including from the Insurance Regulatory & Development Authority of India (Irdai), the Competition Commission of India and the Foreign Investment Promotion Board.
HDFC ERGO is among the few general insurance companies, where the foreign partner has decided to hike their stake. New norms under the Insurance Laws (Amendment) Act have allowed foreign partners in insurance companies to hold up to 49 per cent stake from 26 per cent stake allowed earlier.
For quarter ended September 30, 2015, the insurer's profit after tax jumped to Rs 43.59 crore from Rs 27.03 crore posted in the same quarter previous financial year. Its net earned premium stood at Rs 416 crore for this period in FY16 compared to Rs 425.3 crore in the same quarter last financial year.