Ageas Federal Life Insurance has become the first Indian life insurer to have foreign shareholdings of 74% following the exit of IDBI Bank.
IDBI Bank sold its entire 25% stake in the life joint venture to Belgium-headquartered Ageas Insurance International for INR5.8bn ($71.6m), according to an Ageas statement.
"With this transaction, Ageas increases its interest in the joint venture that it has operated to date together with IDBI Bank and Federal Bank to 74%," the statement said.
Ageas Federal Life Insurance said with the completion of the majority shareholding by Ageas, it is the first life insurer in India in which the foreign partner owns 74%.
Domestic lenders IDBI Bank and Federal Bank along with Ageas had formed the life insurance joint venture then named IDBI Federal Life Insurance Company in 2007 and commenced operations in 2008.
In May this year, LIC-controlled IDBI Bank announced it had reached an agreement with Ageas Insurance International over the disposal of its entire stake of 25%. IDBI Bank remains a distribution partner.
Federal Bank continues to hold the remaining 26% stake in the insurance joint venture.
In the non-life segment, it was Italy's financial services major Generali which raised its stake in Future Generali India Insurance to 74% in May this year.
In the Union Budget 2021-22, the Indian government announced that it would allow foreign players to raise their stakes in Indian joint venture insurance firms to 74% from 49% in a move to attract investment as well as to increase insurance penetration in the country.