Magma Fincorp to get into insurance, expects IRDA nod in FY'11
Vehicle financing firm Magma Fincorp expects regulatory clearance for its general insurance venture with a Germany-based company during this year.
"We have applied to IRDA for approval and expects its nod during the year," Magma Fincorp Chief Financial Officer V Lakshmi Narasimhan said.
The joint venture with HDI-Gerling International Holding AG is expecting R1 (initial approval) clearance soon as the process is almost complete, he said.
Asked if the proposed company can start its operation in the current fiscal, he said that it will depend on the clearance from the regulator IRDA as well as product approval which also takes about 2-3 months.
The proposed joint venture, where foreign partner will have 26 per cent stake, will leverage on the strengths of the two companies to offer general insurance products through the existing strong distribution and service network of Magma with deep penetration in rural India, he said.
Swaraj Krishnan has been appointed as Chief Executive officer of insurance joint venture Magma HDI General Insurance Company.
Magma, he said, already has experience of insurance product distribution as a corporate agent.
Talking about rating provided to its structure obligation worth Rs 243 crore, he said that Crisil has assigned AAA (so), the "highest degree" of safety with regard to timely payment of financial obligations.
The Kolkata-based Magma provides a host of products, including financing of utility vehicles and cars, commercial vehicles, tractors and SME loans. It disbursed Rs 4,559 crore loans last fiscal and has asset under the management to the tune of Rs 9,390 crore.
There are 23 general insurance companies operating in India.