South Africa-based Sanlam Group, which holds 26 per cent stake in Shriram Life Insurance, today said it would increase its stake in the company to 49 per cent as soon as the Indian government raises FDI cap in the sector.
"We see moves towards lifting FDI ceiling from 26 per cent to 49 per cent, which we hope is imminent," Sanlam Group CEO Johan van Zyl told reporters after unveiling new logo of the Shriram Life Insurance here.
Once the regulatory hurdles are cleared, "we will immediately increase our stake in both the insurance joint ventures with Sriram Group," Zyl said, adding that the company has already set aside the required capital.
Sanlam Group also has 26 per cent stake in the general insurance company floated by the Sriram Group.
Shriram Life Insurance is a joint venture of the Shriram Group and Sanlam with South African firm holding 26 per cent strake, maximum permissible ceiling for a foreign partner in a private insurance company.
The bill to amend the Insurance Regulatory and Development Authority Act (IRDA) to raise FDI cap in the private sector insurance companies to 49 per cent is pending in the Rajya Sabha.
The life insurance company has a paid up capital of Rs 125 crore, while that of the general insurance firm is Rs 105 crore. The life insurance firm which in operation for the last 3 years has been a profitable business.
During the first year of operation the company earned a profit of Rs 2 crore, which doubled to Rs 4 crore in the subsequent year, said Shriram Life Insurance Managing Director Akhila Srinivasan.
For the fiscal ended March 2009, the company earned a profit of Rs 8 crore, she said, adding the total premium at the end 2008-09 stood Rs 1,000 crore.
Talking about the business growth, she said the company aims to garner new business premium of Rs 1,000 crore in next three years.
The company also intends to increase its presence in 100 cities in the next 3-4 years, she added.
Source: Business-Standard