New Delhi: As part of its business growth plans, private insurer MetLife India has begun talks with at least three PSU banks for sale of up to 10% stake and bring in a new distributor partner.
MetLife is talking with Corporation Bank, Vijaya Bank and UCO Bank among others to join it as a distributor partner and has also offered them 5-10% stake, either through purchase of shares from existing shareholders or infusion of fresh capital, sources said.
The move is part of MetLife’s plans to expand its business across the country through a stronger distributor network and further equity infusion, sources added.
When contacted, the company declined to disclose the names of the banks or the extent of equity dilution to new partner.
However, MetLife India managing director Rajesh Relan said that discussions were on with potential bank partners.
“We are in discussion with number of prospective bank partners for distribution partners as part of our normal business. If the banks want to have a equity participation, the board of the company will consider such a proposal,” Relan said.
He said that Metlife India was open to bringing in fresh capital as and when required from existing shareholders, and also from new distribution partners.
Sources said that the company was looking for both bank and non-bank distribution partners, who could help in its strong growth momentum and were also willing to bring in fresh capital to support the enhanced business plan.
Post the induction of the new distribution partner, the equity structure at Metlife India is likely to undergo a change, wherein the new partner can buy into existing shareholers or infuse fresh capital.
The US-based insurance giant MetLife and its Indian partners have invested close to Rs2,000 crore of capital in the Indian venture till now.
To strengthen its position, MetLife is also awaiting changes to FDI as well as the IPO norms so that it can increase its stake in its Indian operations.
Relan said that MetLife has declared profits for two consecutive quarters in 2010.
“In the event we establish a tie-up with a large Bank, we are open to bringing in fresh capital through existing shareholders or with strategic distribution partners to meet the requirements,” he added.
MetLife India is an affiliate of Metlife and was incorporated as a joint venture between US-based MetLife International Holdings Inc, The Jammu and Kashmir Bank, M Pallonji and Co Private Limited and other private investors. The insurance company started operation in 2001.