Rajan Raheja-promoted Exide Industries currently owns a 50 per cent stake in the insurance venture, while the remaining 24 per cent stake is held by Enam Group and Hemendra Kothari, a former Merrill Lynch India partner.
IRDA has yet to approve the proposal. A senior IRDA official told NDTV that the regulator has sought an undertaking from the promoter that it will remain invested in the venture for at least five years after it has acquired the stake from Dutch financial services group ING.
“Exide’s investment in the insurance venture is a financial one, with the insurance business largely run by ING Group. The company may also look to sell part of its stake to a foreign partner once foreign direct investment (FDI) regulations are cleared in India”, the sources said.
An Exide spokesperson declined to comment on the story, saying, “As a matter of policy, we don't comment on market rumours.”
ING has been unable to find a buyer for the insurance business for more than three years which seems to have led the promoter to buy out its stake. The sources, however, declined to comment on the valuation of the deal.
ING Life's growth has been slowing with its new business premiums falling 3 per cent in FY12, according to IRDA data. In FY11, it grew a modest 2.6 per cent while the industry grew 15 per cent. The company sells policies in 229 cities across the country, with more than 35,000 agents.
As a strategy to pay back the government bailout it received during the financial crisis in 2008, ING is making an exit from its non-banking businesses, such as insurance and asset management in Asia, including India.