New Delhi : Germany-based ERGO Insurance Group will buy 22.9% additional stake in HDFC ERGO General Insurance for Rs 1,122 crore, becoming the latest foreign insurer to increase holding in Indian venture following relaxation of FDI norms in the sector, reports PTI.

Under the agreement, ERGO will buy 12,33,57,262 shares of HDFC ERGO at a price of Rs 90.97 per share aggregating to Rs 1,122 crore, Housing Development Finance Corporation Ltd said a statement. “As a result of this, ERGO’s shareholding in HDFC ERGO will increase from 25.84 % to 48.74 %, while that of HDFC will come down from 73.63 % to 50.73 %,” it said.

The statement further said the proposed transaction would value HDFC ERGO at Rs 4,900 crore.

In addition to the Insurance Regulatory and Development Authority of India, the insurer has sought the Competition Commission of India and the Foreign Investment Promotion Board’s approval for the stake sale.

Recently, a number of foreign players in the sector have raised stakes in Indian JVs including Nippon in Reliance Life Insurance, AXA in Bharti AXA Life Insurance, Bupa in Max BUPA health insurance and Sunlife Financial Inc in Birla Sunlife. The increased foreign capital in the Indian insurance space is expected to boost competition among various players and help deepen insurance penetration in the country.

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