New Delhi: A decision with regard to stake dilution in SBI Life Insurance in favour foreign partner is to be finalised in the next three-four months, a top official of insurance firm said.
"The discussion with the foreign partner BNP Paribas Cardif of France is going on. It is at advance stages.
Hopefully, a decision should be known in the next 3-4 months," SBI Life Insurance Managing Director and CEO Arijit Basu told PTI.
"Various aspects are being looked at. It is a process which has to be completed as BNP Paribas Cardif first right of refusal," he said.
It is believed that the foreign partner is most likely to increase its stake in the leading life insurance firm promoted by the country's largest lender State Bank of India (SBI).
Last month, SBI decided to divest up to 10 per cent stake in its life insurance venture.
SBI Life Insurance is a 74:26 per cent joint venture between SBI and BNP Paribas Cardif of France. At present, SBI owns 74 per cent of the total capital and BNP Paribas Cardif has the remaining 26 per cent in the joint venture.
Stake dilution by SBI will help the country's largest bank in monetising its investment and provide growth capital for banking business.
SBI Life Insurance has an authorised capital of Rs 2,000 crore and a paid-up capital of Rs 1,000 crore, according to its website.
In March, Parliament passed the Insurance Laws (Amendment) Bill, 2015 which seeks to increase foreign investment in private sector companies to 49 per cent from the existing 26 per cent, among other things.
SBI in March had announced that Insurance Australia Group would increase its stake in their general insurance joint venture SBI General from 26 per cent to 49 per cent. The 74:26 JV began operations in 2010.
In January, UK's Bupa Insurance had said that it would raise stake in its Indian health insurance venture, Max Bupa, to 49 per cent from the current 26 per cent, becoming the first foreign company to announce a hike in shareholding, following amendments to insurance laws.
Recently, the government had approved French insurance firm AXA raising stake in its life insurance JV with Bharti Group to 49 per cent for Rs 858.6 crore.
The French firm has also been permitted to raise stake in the general insurance joint venture with Bharti. This will entail capital flow of Rs 431.40 crore.
Together, AXA's FDI in Bharti group will be worth Rs 1,290 crore.
More foreign partners are expected come forward and raise stake in the Indian insurance business.