Hong Kong-registered insurance group AIA plans to hike its stake in its life insurance joint venture with Tata Sons, joining the list of many other foreign insurance companies who are increasing their exposure to India, since the Narendra Modi-led government hiked the foreign direct investment limit in insurance to 49%.
“Tata Sons and AIA Group Limited on Monday announced an agreement, under which AIA will increase its shareholding in Tata AIA Life Insurance Company, a joint venture company formed by Tata Sons and AIA, from the current level of 26% to 49% through the purchase of a 23% stake,” the companies announced on Monday.
The financial details of the deal were not revealed by the two companies.
The completion of the transaction is subject to securing all necessary regulatory and government approvals.
As a part of its reforms push, the Narendra Modi-led NDA government had in December last year promulgated an ordinance to increase FDI limit in the insurance sector to 49% from 26%. The insurance bill was passed in the parliament in March.
Several foreign players have since announced plans or at least evinced interest to raise their stake in Indian insurance joint ventures, although a deal is yet to be completed.
Japan’s Nippon Life Insurance has signed definitive agreements to increase its stake in Anil Ambani-owned Reliance Life Insurance to 49% from existing 26% for Rs 2,265 crore.
Sun Life Financial last week said it will invest Rs 1,664 crore to increase its stake in Birla Sun Life Insurance, a joint venture with the Aditya Birla Group, from 26% to 49%.
British health insurer Bupa is investing invest Rs 191 crore to hike its stake in Max Bupa Health Insurance to 49%. ICICI Bank too sold 6% stake in ICICI Prudential Life Insurance to Premji Invest and Singapore-based Temasek.