Mukesh Ambani jumped into the insurance bandwagon by buying 74 per cent stake in general and life insurance businesses of Bharati Axa Life and General insurance for around 3000 crores.
“The decision is in line with the Bharti’s strategy of focussing its energies and financial resources in businesses where it is making a deeper impact in India and overseas. At present, the financial services ventures do not fit into Bharti’s long-term growth plans,†the company said in a statement.Â
Bharti intends to use the proceeds from selling its interests in these joint ventures towards other group businesses in India and abroad,†it said.
According to the Reliance statement, RIL and its subsidiary Reliance Industrial Infrastructure (RIIL) would effectively own 57 per cent and 17 per cent, respectively, in both the insurance companies and would become AXA’s joint venture partners in India.
AXA would retain its current 26 per cent shareholding and would continue to manage the day-to-day operations of both joint ventures.
Reliance said the proposed agreement contemplates an option by which AXA would acquire from RIL and RIIL up to 24 per cent shareholding in both the insurance companies in accordance with the applicable regulations as and when the FDI regulations permit such a holding by AXA. “Upon exercise of such an option, RIL will effectively own 45 per cent, RIIL will effectively own 5 per cent and AXA the balance 50 per cent in both the insurance companies,†the Reliance statement said.
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