German insurer Allianz, which has a 26 per cent stake each in Bajaj Allianz Life Insurance and Bajaj Allianz General Insurance, plans to raise its stakes to 49 per cent in both.
“Allianz will increase the stakes immediately after foreign direct investment (FDI) limits are raised,” Kamesh Goyal, country manager, Allianz and CEO of Bajaj Allianz Life Insurance, told Hindustan Times. The bill to raise the limit is currently pending in the Rajya Sabha.
Under the joint venture pact with Bajaj Auto, which holds 74 per cent in the firms, Allianz has a call option that empowers the German partner in the event of policy changes to raise its stake in the general insurance entity to 50 per cent at Rs 10 per share and life insurance at Rs 5.42 per share, plus interest at 16 per cent per annum compounded since April 2001 in both the cases. This agreement is valid until 2016.
Both the insurance companies saw a drop in growth but have been able to register profits in the April-June first quarter. Bajaj Allianz Life insurance had a profit of Rs 68 crore in the quarter as against a loss of Rs 3 crore a year ago.
Bajaj Allianz General insurance had a net profit of Rs 27 crore in the first quarter as against a net profit of Rs 7 crore a year earlier.