Aviva Life has emerged as the front-runner for tying up with Syndicate Bank for its proposed insurance joint venture.
According to sources, the Manipal-headquartered lender is likely to pick up 26 per cent stake. Mohit Burman, director of fast-moving consumer goods major, the Dabur Group, holds 74 per cent stake. The rest is held by UK's Aviva.
A Syndicate Bank official said the bidding process was still on and the bank was yet to decide on the insurance partner. "We have just finished receiving the financial bids and would shortlist three-four players on the basis of financial bids. Then, we would take the final call," said a senior bank official. However, according to sources involved with the deal, Avia Life is better placed, as it is willing to offer significant equity.
In April, Syndicate Bank had shortlisted a dozen insurance companies to enter the life insurance sector. Those included existing players Aviva Life, Birla Sun Life, HDFC Life, Max New York Life and Metlife India Life. The list included three new companies planning to start the life insurance business in India—Avantha Ergo and Japanese insurers Mitsui Sumitomo Insurance Company Limited and Sumitomo Life Insurance Company.
Aviva Life started operations in 2002 and till March, its promoters had infused Rs 2,004 crore. The company had declared a profit of Rs 29 crore for 2010-11. Aviva was among the final companies shortlisted by Punjab National Bank for its insurance joint venture. However, in July, the Delhi-based bank entered into an agreement with Metlife to buy 30 per cent stake in Metlife India.