Date:18/01/2006 URL: http://www.thehindubusinessline.com/2006/01/18/stories/2006011802890900.htm

Back Bharti to hold 40 pc stake, AXA 22.2% in life insurance venture

Ambarish Mukherjee

New Delhi , Jan. 17

THE Bharti group and global insurance major AXA have finalised the equity holding structure for their Indian life insurance venture. Bharti Enterprises would directly hold the largest chunk of 40 per cent shares while AXA would directly own 22.2 per cent. The two joint venture partners have also joined hands to create an SPV that would hold the remaining 37.77 per cent stake in the insurance company.

The SPV, which would have 90 per cent shareholding by Bharti and the remaining 10 per cent by AXA, has been incorporated in India under the name First American Securities Pvt Ltd.

The Indian insurance joint venture has been named Bharti AXA Life Insurance Company Ltd (BALICL).

The foreign equity guidelines for the insurance sector stipulate an FDI cap of 26 per cent from all sources. The AXA group's 22.22 per cent holding would be through a newly incorporated entity Mauritius-based subsidiary AXA India Holdings. AXA Asia Pacific Holdings Ltd (AXAAPH) is using several subsidiaries to route its investments into India, the company has informed the Foreign Investment Promotion Board (FIPB).

AXA has sought permission from FIPB for pumping in approximately Rs 130 crore FDI into the venture over the next three to four years.

The company has sought specific permission from FIPB to invest in the SPV since investment holding companies need case-by-case approval from the FIPB, sources said.