Sun Life hikes stake in Birla venture to 49%

Aditya Birla Nuvo (ABNL) on Monday announced that Canada-based Sun Life Financial has increased its stake in the life insurance joint venture, Birla Sun Life Insurance (BSLI) from 26 per cent to 49 per cent.

With the regulatory approvals in place, from Insurance Regulatory and Development Authority of India , the Foreign Investment Promotion Board and Competition Commission of India , ABNL sold approximately 437 million equity shares constituting 23 per cent of the issued and paid-up equity share capital of BSLI to Sun Life.

The Office of the Superintendent of Financial Institutions in Canada, the principal regulator of the Canadian insurer Sun Life, has also approved of the transaction.

ABNL, which continues to hold the controlling stake in BSLI at 51 per cent, has received a sum ₹1,664 crore from the stake sale, valuing BSLI at ₹7,235 crore.

The proceeds will reduce the net debt of ABNL substantially. Coupled with the free cash flow generation from divisions, the standalone balance sheet of ABNL stands strengthened to support its growth plans

BSLI is one of the leading private life insurers in India, with a market share of 6.9 per cent for the nine months ended December 31, 2015. Its assets under management, as on 31{+s}{+t} December 2015, stood at ₹30,421 crore.