Bank of India is looking to sell stake in the life insurance company in joint venture with Japan’s Daiichi and Union Bank of India -Star Union Daiichi to raise around Rs 2,000 crore.
“Bank of India is looking to sell stake in life insurance business to fund growth as it struggles to maintain capital adequacy under prompt corrective action,” said a source close to the development. “If the bank gets good value, it may completely exit from the venture.”
Bank of India owns 29% in the venture. Daiichi has bought 18% from Bank of India in 2016 valuing the company at Rs 3,000 crore, when the foreign direct investment limit was raised to 49%. Daiichi owns around 45%, Bank of India 29% and Union Bank of India 26%. When contacted the company spokesperson declined to comment.
In terms of APE, the company plans to close the year with Rs 800 crore and gross revenue of around Rs 2200 crore. The company is looking to book Rs 100 crore profit from this financial year.
Star Union Daiichi started operations in 2008 with initial capital of Rs 400 crore, which included share premium brought in by Daiichi. The promoters later on invested Rs 100 crore taking the share capital to Rs 500 crore.
The company has a market share of 2% of individual APE in the private sector insurance space. The individual APE for the company has been flat for April-November to Rs 400 crore.
It will be a good step for BOI
ReplyDeleteGood for BOI
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