Mumbai, Dec 25 (IANS) Murugappa Group firm Tube Investments of India on Friday said that it will sell 14 percent of its stake in Cholamandalam MS General Insurance (Chola MS) for Rs.882.67 crore, after securing regulatory approvals.
According to the company, it will sell its stake in Cholamandalam MS General Insurance to its joint venture (JV) partner, Mitsui Sumitomo Insurance (MSI) of Japan.
“The board of directors of Tube Investments of India, at its meeting held today, has approved the sale of 14 percent shareholding in Chola MS to its joint venture partner, MSI,” the firm said in a regulatory filing.
“Upon completion of the transaction, MSI will increase its ownership in the general insurance joint venture from 26 percent to 40 percent,” the regulatory filing to Bombay Stock Exchange (BSE) added.
The stake sale announcement is a result of amendments made to the insurance law in January, 2015.
The amended law now permits foreign direct investment (FDI) up to 49 percent which has led some foreign partners in Indian insurance JVs to announce their plans to increase their holdings.
Earlier, Japanese Nippon Life announced its decision to acquire additional stake in Reliance Life Insurance.
Similarly, AXA announced its interest to increase its stake in Bharti AXA Life Insurance and UK’s Bupa in Max Bupa operating in the health insurance space.
In addition, AIA Group had announced to increase its stake in Tata AIA Life to 49 percent.