Japan-based Mitsui Sumitomo Insurance Company Ltd (MSI) is increasing its stake in Cholamandalam MS General Insurance Company (Chola MS) to 40% from the current level of 26%. Sumitomo has a joint venture (JV) with Murugappa Group firm Tube Investments of India (TII) for this general insurance venture.

TII has agreed to divest close to 14% of its shareholding in Chola MS to its Japanese joint venture partner MSI for a consideration of R882.67 crore. According to an announcement by TII, its board of directors has approved the sale of 14% shareholding in the general insurance company to its joint venture partner, subject to regulatory approvals.
The board has approved the divestment of 41,832,798 equity shares of the face value of Rs 10 each held by the company for a consideration of R211 per equity share, aggregating to Rs 882.67 crore.

M M Murugappan, chairman of TII, said, “This will further strengthen our relationship with MSI and help realise our vision in making Chola MS a most respected general insurer in India.”

Karasawa, president and CEO of MSI, said, “We are very pleased that Murugappa Group accepted our offer to increase our stake in Chola MS. We will cooperate with Murugappa Group to increase the value of Chola MS through this transaction.”

Chola MS is a subsidiary of TII, with a total revenue of Rs 1,779 crore during the financial year 2014-15.

A slew of foreign insurance firms have of late been increasing their stakes in their respective joint ventures in India, after the Centre allowed foreign players to increase their stake in these joint ventures from 26% to 49%.