India-based Bajaj Finserv has reportedly decided to divest part of its stake in its life and non-life insurance joint ventures (JVs) to its overseas partner Allianz, following amendment in the insurance Act.
Bajaj Finserv managing director Sanjeev Bajaj was quoted by The Times of India as saying that the life insurance business and the non-life insurance business were generating funds to sustain themselves and no further capital infusion was required.
"If the Act is amended, Bajaj Finserv will sell its shares to bring its stake down from 74% and shareholders will gain as money would come to the company," Bajaj said.
Bajaj Finserv has reached an agreement with Allianz, whereby the multinational insurance firm will be able to increase its shareholding in life insurance up to 74% and in non-life up to 50%, provided the regulations allow it.
Indian finance minister Arun Jaitley had said that the government will allow 49% foreign investment in insurance.
Bajaj Finserv owns 74% and 61.54% stake in Bajaj Allianz Life Insurance Company and Bajaj Allianz General Insurance Company, while rest are owned by Allianz.