AXA bags India's approval to raise stake in insurance joint ventures

AXA, Europe's second biggest insurer, has bagged the Indian government's approval to raise its stake in two insurance joint ventures with Bharti Enterprises to 49%.

AXA owns 26% each in Bharti AXA Life Insurance and Bharti AXA General Insurance.

Bharti Enterprises owns the remainder.

The increase in AXA's stake will see the French firm pump INR 8.59bn (£88m, €120m, $135.2m) into the life insurance venture and INR 4.31bn in the general insurance venture, India's finance ministry said in a 5 May statement.

India's Foreign Investment Promotion Board (FIPB) approved 19 foreign direct investment proposals totalling INR 21.65bn in a meeting on 9 April, the statement added.

In March, the foreign ownership limit in Indian insurance companies was increased to 49% from 26% as the Indian Parliament voted to change the law, in the first major economic reform almost a year after Prime Minister Narendra Modi assumed power.

In February, British insurer RSA agreed to sell its 26% holding in Indian firm Royal Sundaram Alliance Insurance Company to its joint venture partner Sundaram Finance.

RSA, on 18 February, said it expected to receive £46m in cash for the stake and that it will earn a £16m profit on the sale.

In January, British insurer Bupa proposed to increase its stake in its Indian joint venture. The health insurer owns 26% of Max Bupa Health Insurance, which is 74% owned by Max India.

Modi, in late December, employed a rarely-used executive order to implement insurance and coal policy changes, displaying his tenacity to overhaul Asia's third-largest economy despite political opposition in parliament back then.

Under the executive order, known as an ordinance, foreign firms can increase their participation in insurance joint ventures to 49% from 26%, a potential lifeline for a sector starved of capital and bogged down by regulations.