Exide to infuse Rs 400 cr more into ING Vysya

Kolkata, Nov 29 | Updated: Nov 30 2006, 09:12am hrs
Exide Industries Ltd, which has 50% stake in ING Vysya Life Insurance Co, has decided to step up its planned investments in the insurance company. Against a targeted investment of Rs 400 crore as equity capital which was planned earlier, the Rajan Raheja group company has now decided to invest Rs 700 crore over the next three years, of which Rs 100 crore will come during the next calendar year to support the insurance companys growth plans.

Exide has invested Rs 280 crore equity in the insurance company since it was acquired. The battery maker, however, will maintain its stake in the insurance company at 50%. SB Ganguly, chairman and CEO, Exide, said, In order to support the growth plans of ING Vysya, we may infuse additional equity capital to the tune of Rs 400 crore over the next three years. However, there is no plan to alter the stake we have in ING Vysya. He also said that there is no plan to raise equity from the market as Exide has surplus funds which will be used for the capital infusion. The total paid up capital of the company is Rs 540 crore currently, and the company is planning to step up total capitalisation to Rs 1380 crore by 2009.

The ING Group has 26% stake in the company, the maximum limit allowed by law. The rest is divided between Gujarat Ambuja Cement and Enam Securities. The insurance company has set out an ambitious plan to achieving a premium income of Rs 5000 crore by the year 2010.

We expect this years premium income to grow more than 100% as compared with last year to touch Rs 700 crore. By 2010, we aim to achieve Rs 5000 crore, of which 45% should come from renewals. This will help us reduce operational expenses. The company plans to reduce its operational cost from 60% (of revenues) to 18% in the next three years, said Kshitij Jain, MD and CEO, ING Vysya.