REUTERS, Johannesburg | Wednesday 10.40am.
LONDON-listed financial services firm Old Mutual announced a joint venture with India’s Kotak Mahindra Group to set up a nationwide life assurance business in the liberalising Indian market.
Old Mutual said the venture would be capitalised at about 1.5 billion rupees or 22.25m with Kotak Mahindra Finance Ltd initially owning 74 percent of the share capital and Old Mutual the other 26 percent.
By law, foreigners are limited to 26 percent equity in Indian insurance firms, but there have been reports that the restriction may be relaxed. Last year India legislated to end a state monopoly in the sector.
The two firms plan to apply quickly to India’s insurance regulator for a licence to operate the business nationwide.
Old Mutual said its partner was a leading Indian financial services firm covering consumer finance, fund management, investment banking and securities trading and research.
It said the Kotak Mahindra Group had an extensive branch network across India managing relationships with over 500000 individual customers and 400 corporate houses.
Old Mutual, though listed in London, developed its business in South Africa where it has a major life assurance operation.