MUMBAI: Insurance Australia Group Ltd will raise its stake to the maximum allowed 49 percent in a general insurance joint venture with State Bank of India, the Indian lender said on Thursday, following rule changes earlier this month.
IAG currently owns 26 percent of SBI General Insurance, with SBI, India's largest lender, holding 74 percent. After the deal, SBI's stake in the venture will fall to 51 percent, it said.
Thursday's announcement follows a long-awaited legal change earlier this month, which lifted limits on foreign investment in the insurance sector to 49 percent, from 26 percent. Analysts estimate deals following that move could lead to foreign inflows of about $4 billion.
SBI said in its regulatory filing that the executive committee of its central board had decided to begin the process, including the appointment of a valuer to decide on the price of shares in the unlisted general insurer.
The Indian lender has separately been in talks with BNP Paribas to sell down its stake in their Indian life insurance joint venture. BNP currently has 26 percent of the venture with SBI owning the remainder.
SBI may look at an initial public offering of the life insurance unit, but it could take more than a year, the bank's chairman told Reuters this week.
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