Magma may dilute stake in insurance JV from 74pc to 51pc
Jul 10 2014 , Kolkata
"HDI is committed to increasing its stake to permitted FDI level in accordance with the law of the land. The Budget announcement had offered increase in foreign stake to 49 per cent and so HDI would hike its stake to the limit," Magma HDI MD & CEO Swaraj Krishnan told PTI.
He said that in all probability the hike in stake in the JV company would be done by way of expansion of capital.
At present, Magma holds 74 per cent and the German partner HDI- Gerling Industries Versicherung AG holds 26 per cent as per current FDI norms in the Rs 208 crore paid-up capital.
The company is currently adequately capitalised, but in case there is capital infusion to adjust to a new holding structure, it will use the resource for aggressive expansion of business, Krishnan said.
However, he said that so far 26 per cent FDI was through automatic route, but the budget proposal to take FIPB approval for such increase in FDI will delay the proccess.
Krishnan had earlier proposed increasing its gross written premium to Rs 600 crore in FY'15 from Rs 425 crore in last fiscal.
But, these projections could change if the capital structure was changed.