Soon after the Rajya Sabha passed the Insurance Amendment Bill paving the way for raising the FDI limit in the sector to 49% from 26%, Indian companies swung into action to realign their existing partnerships with foreign firms.
Bharti Enterprises said its foreign partner AXA will step up equity investment to 49% in the joint venture. Bharti Enterprises and AXA have a 74:26 JV with Bharti holding the majority stake.
"Bharti will soon move the application to the Foreign Investment Promotion Board (FIPB) as per the new FDI guidelines," Bharti Enterprises chairman Sunil Bharti Mittal.
Rahul Khosla, MD, Max India said: "All options are open for us and we will evaluate these to optimise our position. Our health insurance JV partners Max Bupa has already announced its intent to increase stake in Max Bupa from 26% to 49%."
Besides, the industry also expects the move to result in better services for consumers.
"As the Indian insurance industry expands there will be a need for capital to build this scale," said Sandeep Bakhshi, MD and CEO, ICICI Prudential Life Insurance. "The increased FDI limit will provide flexibility to raise capital. Customers will benefit as it will translate into delivery of better products and services."
"This Act holds enough and more potential to jumpstart the sector on a sustainable basis," said Anuraag Sunder, managing consultant, financial services, PwC India. "There would be all-round impact across new players, deeper capital, topline growth. Value unfolding may also take place through IPOs, consolidation and other routes."