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Bharti-AXA finalize equity holding in insurance venture
By agencies
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Wednesday, 18 January 2006, 20:30 IST
NEW DELHI: The Bharti group and global insurance major AXA have finalized the equity holding structure for their Indian life insurance venture.
In this JV, Bharti Enterprises would directly hold the largest chunk of 40 percent equity while AXA would directly own 22.2 percent. Both entities have also joined hands to create an SPV that would hold the remaining 37.77 percent stake in the insurance company.
The SPV, which would have 90 percent shareholding by Bharti and the remaining 10 percent 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 percent from all sources. The AXA group's 22.22 percent 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 $29.54 million 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.