Prudential to up stake in life JV

Prudential Life Insurance is likely to increase its holding in ICICI Prudential Life Insurance Company to 49 per cent.

ICICI Bank, on the other hand, is also likely to make way and reduce its stake in the company to but remain a majority partner at 51 per cent holding, said sources close to the development.

At present, Prudential Life holds 26 per cent in the company, while, ICICI Bank holds 74 per cent. Once the cap on foreign direct investment is enhanced, which is likely to be increased to 49 per cent, both the partners will adjust their stakes with ICICI Bank remaining the majority player.

"There are no formulas in the Article of Association (AoA) for any change in stake for our company, once there is a change in the cap on foreign holding by the government, but the AoA mentions that the shareholding of both the promoters would be reviewed at appropriate times, leaving scope for both the promoters to enhance their stakes," explained Sikha Sharma, managing director and chief executive officer, ICICI Prudential.

"Both our promoters are financially very sound and they are not likely to have any problem infusing funds into the company for maintaining adequacy ratios," he explained.

But sources close to the development said that Prudential was likely to take a larger stake in the joint venture.

Meanwhile, the promoters also have firmed up plans of infusing around Rs 50 crore into the equity of the company.

ICICI Bank would pump in Rs 37.5 crore while, Prudential would pump in another Rs 12.5 crore. The capital infusion exercise is expected to be complete by March this year.

The company has also firmed up plans of launching a annuity policy and a equity linked product next year.