ICICI Bank ups stake in Prudential AMC to 51%

ICICI Bank has increased its stake in Prudential ICICI Asset Management Company to 51 per cent, thus reducing Prudential Plc's stake in the venture to 49 per cent from 55 per cent.

The two financial entities in a joint release today said, "ICICI Bank has agreed in principle to purchase from Prudential an additional 6 per cent share of the paid-up equity capital of Prudential ICICI AMC and Prudential ICICI Trust, the trustee company for Prudential ICICI Mutual Fund."

While company officials were tight-lipped about the size of the deal, it is estimated that the stake sale is valued between Rs 60 crore and Rs 65 crore.

Describing it as a strengthening of the partnership, Anthony Shaw of Prudential Plc, said, "The transaction reflects both partners' continued commitment to the growth of their successful partnership in the life insurance and asset management joint ventures. Both partners also look forward to the opening up of the pensions sector and to the further strengthening of their relationship in the life insurance joint venture as regulations permit."

Laying to rest apprehensions that Prudential might be phasing itself out of the asset management business in India, Shaw said "Asset management is a key line of business for Prudential in Asia. Our company in India is very important to Prudential and we are proud of its accomplishments. We will still hold 49 per cent in this joint venture and remain fully committed to growing this business."

About the implications of the change in shareholding pattern Shaw said "We have confidence in our current strategies which have bought the business to its market leading position. We believe this new agreement will allow us to continue to build on the company's already strong position within the India asset management sector. No management changes are envisaged or planned at this time." ICICI Bank sources also said that no changes in the board structure have been envisaged now.

The transaction is subject to approval of the Securities and Exchange Board of India and other regulatory approvals.

Both partners reiterated their continuing commitment to the growth of their partnership in the life insurance and asset management joint ventures, while looking forward to the opening up of the pensions sector and to the further strengthening of their relationship in the life insurance venture. Pru ICICI Mutual Fund has assets of Rs 16,000-odd crore under management.