Bharti Group on Wednesday said it has entered into a binding agreement with its joint venture partner AXA to acquire its 49% stake in Bharti AXA Life Insurance.
Post transaction, Bharti Life Ventures, the holding company of Bharti AXA Life Insurance Company, will own 100% in the life insurer.
Currently, France-based AXA owns 49% stake in the joint venture with Bharti.
Pursuant to Bharti’s and AXA’s decision to merge Bharti AXA General Insurance with ICICI Lombard in 2020, and the subsequent exit of AXA from the shareholding of ICICI Lombard, Bharti Life Ventures has now entered into an agreement to fully own Bharti AXA Life Insurance, according to a statement issued by Bharti on Wednesday.
The transaction is expected to close by December 2023 and is subject to receipt of regulatory approvals.
“Bharti’s intention is to ensure that the life Insurance business continues to serve the Indian market and, in this regard, it is engaging with other strategic and financial investors to partner and or combine, so as continue to scale this business,” the statement added.
Bharti AXA Life Insurance had started its operations in 2006 as a JV, in which Bharti group and AXA group had 74% and 26% stakes, respectively. After the government enhanced the foreign investment cap in a domestic insurance company from 26% to an explicitly composite limit of 49% in 2015, AXA had increased its stake in the JV to 49%.
Bharti had also set up another joint venture with AXA in 2006 to form Bharti AXA General Insurance. In 2020, Bharti and AXA exited the general insurance business by selling the company to ICICI Lombard. Bharti AXA General Insurance was merged with ICICI Lombard General Insurance. The transaction came into effect on September 8, 2021, after receipt of necessary approvals from the National Company Law Tribunal (NCLT) and the Insurance Regulatory and Development Authority of India (Irdai).
Bharti AXA Life Insurance posted a 12.37% year-on-year fall in its new business premium to Rs 377.54 crore for the first quarter this fiscal when collective new business premium or the first-year premium of 26 private sector life insurance companies grew 13.75% y-o-y to Rs 65,734.19 crore, according to data released by the Life Insurance Council.
The life insurance company had registered an 8.79% y-o-y growth in its new business premium to Rs 10,16.91 crore for FY23 from Rs 934.71 crore in FY22.