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BW Businessworld

AXA Wins Approval To Raise Stake In Joint Ventures

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Europe's second biggest insurer AXA has won the Indian government's approval to raise its stake in two local insurance joint ventures with Bharti Enterprises to 49 per cent.
In March, foreign ownership limit in Indian insurance companies was lifted to 49 per cent from 26 per cent as parliament voted to change the law, in the first major economic reform almost a year after Prime Minister Narendra Modi came to power.
The French firm currently owns 26 per cent each in Bharti AXA Life Insurance Co. Ltd and Bharti AXA General Insurance Co. Ltd, with Bharti Enterprises owning the remainder. Both AXA and Bharti had said in March that AXA planned to raise its stake in the ventures to 49 per cent.
The increase in AXA's stake in the life insurance venture will lead to a foreign direct investment of 8.59 billion rupees ($135 million), and 4.31 billion rupees in the general insurance venture, the finance ministry said in a statement late on Tuesday.
More foreign partners are expected come forward and raise stake in the Indian insurance business.
The Foreign Investment Promotion Board approved 19 foreign direct investment proposals totalling 21.65 billion rupees in a meeting on April 9, the statement said.
Among others, Mylan Laboratories' FDI proposal worth Rs 128.77 crore has also been cleared.
The pharma firm had sought prior approval for increase in the level of FDI in the company by existing non-resident shareholders, MP Laboratories (Mauritius) Ltd. and Mylan Luxembourg pursuant to a composite scheme of arrangement.
At the same time, Rs 124-crore proposal of another pharma company Par Formulations Private Ltd was also considered and cleared. Curatio Healthcare's proposal of Rs 93.43 crore has also been approved.
The FIPB also cleared FCC Clutch India's proposal of 444.50 crore.
FCC India had sought permission to acquire additional 50 per cent equity stake (represented by 39,50,000 equity shares) in FCC Rico from FCC Co Ltd, the consideration for which would be discharged by swap of shares wherein FCC India's equity shares would be issued to FCC Japan, it said.
The FIPB deferred 10 proposals, including that of BASF Chemical India Pvt Ltd, Vivimed Labs Ltd and Sharekhan Ltd.
However, 12 proposals were rejected by the board. These included Nickelodeon Asia Holdings Pte Ltd, Singapore, S Kumars Nationwide Limited and Warden Petrochem Pvt Ltd.