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IDBI Bank to sell quarter of its stock in Ageas Federal Life Insurance

IDBI Bank has barged into a share purchase agreement to sell its remaining 25% stake in private sector life insurer Ageas Federal Life Insurance for Rs 580 crore, making Ageas one of the few foreign insurers to increase its stake in its Indian insurance joint venture to 74 percent after the government raised the FDI cap in the insurance sector.  The deal is scheduled to close in Q2FY23, pending regulatory approvals and the fulfilment of the share purchase agreement’s terms and conditions. Ageas, a European insurer, has already expanded its stake in the Indian insurer from 26% to 49% in December 2020.

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Federal Bank’s shareholding in the company remained at 26%. The insurer’s name was changed from IDBI Federal Life Insurance to Ageas Federal Life Insurance as a result of this.

Key Points:

  • Ageas Insurance International now owns 49 percent of the private sector life insurer Ageas Federal Life Insurance, while Federal Bank owns 26 percent. 
  • Ageas Insurance International will increase its investment in the insurance company to 74 percent after purchasing IDBI Bank’s 25% interest.
  • Generali finalised the acquisition of a 25% investment in Future Generali India Insurance, bringing its total ownership in the company to 74 percent.
  • After the Indian government agreed to boost the FDI quota in the industry to 74 percent in the 2021 Budget, Ageas Insurance International and Generali are among the few insurers looking to increase their interest in their Indian insurance joint venture to 74%.

Due to a high increase in Covid-related mortality claims, Ageas Federal generated a net profit of Rs 94 crore in FY22, compared to Rs 119 crore in FY21, a 21% decline.

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