Prem Watsa's Fairfax to increase stake in ICICI Lombard to 35%

ICICI Bank to sell 9% stake sale in general insurance venture to foreign partner

Fairfax Financial Holdings will increase its stake in ICICI Lombard General Insurance to 35% approximately from 25.7% held currently.

ICICI Bank Board has approved the sale sale of 9% stake in its general insurance venture ICICI Lombard General Insurance to its foreign partner Fairfax Financial Holdings. The deal values the company at Rs 17,225 crore.

The general insurance venture, a JV between ICICI Bank and Prem Watsa-promoted Fairfax Financial Holdings, has the Indian promoter holding 73.19% stake, while the foreign promoter has 25.71% stake.

Earlier, foreign partners were only allowed to hold 26% stake in an insurance venture which has now been increased to 49% after the passage of the Insurance Laws (Amendment) Act.

 

In a statement to the stock exchanges, the Bank said that upon completion of the transaction, the share ownership of ICICI Bank and Fairfax will be approximately 64% and 35%, respectively.

The insurer will have to make an application to the Foreign Investment Promotion Board (FIPB) for increase in the stake. Post FIPB approval, the insurance regulator will be required to give its nod to the deal.

ICICI Lombard is the largest private sector general insurance company and had a net earned premium of Rs 1,220 crore for the second quarter ended September 30, 2015. 

In August this year, Standard Life had said that it will buy 9% additional stake in its Indian insurance venture HDFC Life taking its stake to 35% from 26% at present. This deal had valued HDFC Life at Rs 18951.4 crore.