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Federal Bank, one of the domestic partners in IDBI Federal Life Insurance, today said Europe's Ageas may hike stake in the insurance company to 49 per cent.
The domestic partners -- IDBI Bank and Federal Bank-- are exploring the option of diluting their stake in the life insurance venture.
"Evaluation is going on. An independent third party agency is doing that. All aspects are being looked at for dilution of stake in favour of our foreign partner so that Ageas could increase its stake up to 49 per cent," Federal Bank CEO and Managing Director Shyam Srinivasan told PTI.
However, he said, it is at very preliminary stage and nothing has been finalised and many things are to be looked at before reaching a decision.
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The company, which started its operation in 2008, is a joint venture of IDBI Bank, Federal Bank and Ageas, with shareholding of 48 per cent, 26 per cent and 26 per cent, respectively.
Many companies have started the process of diluting stake in favour of their foreign partner as Parliament in March passed the Insurance Laws (Amendment) Bill, 2015 which seeks to increase foreign investment in private sector companies to 49 per cent from the existing 26 per cent, among other things.
In January, UK's Bupa Insurance had said that it would raise stake in its Indian health insurance venture, Max Bupa, to 49 per cent from the current 26 per cent, becoming the first foreign company to announce a hike in shareholding, following amendments to insurance laws.
Recently, the government had approved French insurance firm AXA raising stake in its life insurance JV with Bharti Group to 49 per cent for Rs 858.6 crore.
The French firm has also been permitted to raise stake in the general insurance joint venture with Bharti. This will entail capital flow of Rs 431.40 crore.
Together, AXA's FDI in Bharti group will be worth Rs 1,290 crore.
More foreign partners are expected come forward and raise stake in the Indian insurance business.
