As part of its growth plans, private insurer MetLife India has begun talks with at least three public sector banks (PSBs) for sale of up to 10 per cent stake and bringing in a new distributor partner.
MetLife was in talks with Corporation Bank, Vijaya Bank and UCO Bank, among others, to join it as a distributor partner and had also offered them 5-10 per cent stake, either through purchase of shares from existing shareholders or infusion of fresh capital, sources said. The move was part of MetLife’s plans to expand business through a stronger distributor network and further equity infusion, they added.
When contacted, the company declined to disclose the names of the banks or the extent of equity dilution. However, Managing Director Rajesh Relan said discussions were on with potential bank partners.
“We are in discussion with a number of banks for being distribution partners as part of our normal business. If the banks want to have a equity participation, the board will consider such a proposal,” Relan said.
He said that Metlife India was open to bringing in fresh capital, as and when required, from existing shareholders and new distribution partners. Sources said the company was looking at both bank and non-bank distribution partners, who could help with its strong growth momentum and were also willing to bring in fresh capital to support the enhanced business plan.
Post the induction of the new distribution partner, the equity structure at Metlife India is likely to undergo a change, wherein the new partner can buy into existing shareholers or infuse fresh capital. MetLife, the US-based insurance giant, and its Indian partners have invested close to Rs 2,000 crore of capital in the Indian venture till now.
To strengthen its position, MetLife is also awaiting changes to the foreign direct investment (FDI) and initial public offering (IPO) norms to increase stake in its Indian operations.
Relan said MetLife had declared profits for two consecutive quarters in 2010. “In case we establish a tie-up with a large bank, we are open to bringing in fresh capital through existing shareholders or with strategic distribution partners to meet the requirements,” he added.
