Japan's Mitsui Sumitomo Insurance Company Ltd has agreed to buy an additional 14 per cent stake in its Indian insurance venture with Murugappa Group for Rs 882.67 crore ($133.5 million).
Mitsui will now hold a 40 per cent stake in Cholamandalam MS General Insurance Co Ltd. It will purchase the stake from Tube Investments of India Ltd, the Murugappa Group company said in a statement.
The Chennai-based Murugappa Group has business interests in sectors such as auto parts, cycles, farm inputs, fertilisers, sugar and plantations, besides financial services.
Mitsui, which has a separate life insurance joint venture with Max India Ltd, joins a raft of foreign companies increasing their stakes in Indian insurance ventures.
India opened insurance for private companies in 2000 while also allowing foreign players to take a 26 per cent stake. The foreign holding limit was raised to 49 per cent in March this year. Since then more than a dozen deals have been announced with a total disclosed value of over $2.3 billion.
Hong Kong-based AIA Group, British health insurer Bupa Plc, Japan’s Nippon Life and Tokyo Marine, UK insurer Aviva Plc, French firm Axa and Australia’s QBE Group and Insurance Australia Group Ltd are among the companies that have raised or are planning to raise their stake in their Indian insurance JVs.
Canada's Sun Life Financial has also announced plans to increase its stake in Birla Sun Life Insurance, a joint venture with Aditya Birla Nuvo, to 49 per cent by spending Rs 1,664 crore for the additional 23 per cent.