Through an ordinance, the government has permitted foreign investment of up to 49 per cent in the insurance sector, from a limit of 26 per cent previously.
"Following the Insurance Laws Amendment Ordinance 2014 receiving legislative assent in the 2015 Budget Session of Parliament, Bupa, the international healthcare group, proposes to increase its stake in Max Bupa from 26 per cent to 49 per cent," the private insurer said in a statement.
While Max Bupa is the first insurer to make a concrete announcement of increase in foreign holding to 49 per cent, Reliance Capital recently said it is also exploring bringing in a foreign partner with up to 49 per cent stake in its health insurance venture.
Bupa will submit formal applications to the relevant authorities for the regulatory approvals required in order to increase its stake, it said.
Max Bupa, standalone private health insurer, is a joint venture between Max India (with 74 per cent stake) and UK-based global healthcare group Bupa (26 per cent).
Launched in 2010, the company has a customer base of two million across India.
Commenting on the decision to increase Bupa's stake in Max Bupa, David Fletcher, Managing Director of International Development Markets at Bupa said, "This decision underlines Bupa's commitment to the Indian health insurance market and represents a major milestone in the development of Max Bupa."
Max India shares were up 3 per cent in afternoon trade.