HYDERABAD: In a first, health insurer Max Bupa, on Monday said its foreign partner Bupa Insurance will increase its stake to 49 per cent from the current 26 per cent.
UK-based Bupa emerges as the first foreign company to announce its intent to increase its stake in the Indian venture — Max Bupa — following the Insurance Laws (Amendment) Ordinance, 2014, which was promulgated last month. The Ordinance allows insurers to increase foreign direct investment (FDI) up to 49 per cent from the earlier 26 per cent and is expected to give a much-needed fillip to the cash-starved insurance sector that needs an estimated `50,000 crore capital infusion to penetrate.
There are over 52 players, including 28 non-life insurers and 24 life insurers and the revised investment norms are expected to attract FDI into the sector.
Recently, Reliance Capital too said it was exploring roping in a foreign partner with up to 49 per cent stake in its health insurance venture.
“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,” it said.
It added that Bupa will submit formal applications to the relevant authorities for the regulatory approvals required in order to increase its stake.
Started in 2010, Max Bupa is a joint venture between Max India, which holds 74 per cent stake and Bupa with 26 per cent stake. It has a customer base of two million across the country.
“This decision underlines Bupa’s commitment to the Indian health insurance market and represents a major milestone in the development of Max Bupa,” said David Fletcher, MD, International Development Markets, Bupa.
He added that with the partner Max, the company was committed to supporting growth and help Indian consumers live healthier lives.
According to Rahul Khosla, Managing Director, Max India, Bupa’s intention to increase its stake was testimony to the huge opportunity for health insurance in India and Max India’s reputation in successfully managing joint ventures.