Bharti exits financial services as RIL enters retail financial services
Mumbai: Mukesh Ambani-led RIL has acquired Bharti Group’s entire 74 per cent stake in its life and general insurance joint venture with French firm AXA. Bharti Group sold the stakes to RIL for an undisclosed amount, according to reports carried by the media. Following this deal, Bharti Group has finally made an exit from its general and life insurance businesses, which it held as a joint venture with AXA. There have been media reports that Bharti has sold its stake in the mutual fund business to a PSU bank.
In a separate statement, RIL has reportedly said that the company had reached an understanding with Bharti on acquiring its entire stake in the joint venture with AXA. This stake sale is subject to necessary approvals from IRDA, CCI and any other relevant authorities.
Bharti had entered into these joint ventures with the AXA group in 2006 and held 74 per cent stake in these ventures - Bharti AXA Life Insurance and Bharti AXA General Insurance. The group reportedly intends to use the proceeds from selling its stakes towards group businesses in India and abroad.
According to the RIL statement published in the media, RIL and its subsidiary Reliance Industrial Infrastructure Limited (RIIL) would effectively own 57 percent and 17 percent in both the insurance companies respectively and would become AXA's JV partners in India.
AXA would retain its current 26 percent shareholding and would continue to manage the day to day operations of both JVs. As per the existing regulations, the foreign partner in the insurance sector is allowed to have a maximum stake up to 26 percent in the joint venture.