Mumbai: Financial services firm Edelweiss Capital Ltd on Monday signed a joint venture (JV) agreement with Japanese insurer Tokio Marine Holdings, Inc., (TMH) to enter the life insurance sector.
The JV, Edelweiss Tokio Life Insurance (ETLI), will apply to the Insurance Regulatory & Development Authority (Irda) for approval to start operations, which may take between eight months and one year to start, Edelweiss Capital’s chairman Rashesh Shah said.
“Edelweiss will have 74% stake in the JV and the remaining with Tokio Marine Holdings,” he said, adding that the JV will start with Rs550 crore paid-up equity capital.
The Japanese major might increase its stake in the JV to 49% as soon as IRDA hikes the foreign direct investment limit in the life insurance sector, Shah said.
He added that ETLI, the new JV, would appoint 40-50 people in the project team initially and add to it when it gets Irda approval.
TMH managing director Hiroshi Endo said the company had been waiting for a right partner to enter the life insurance space and that Edelweiss met all its partnership criteria such as strong financial capital base and strong brand equity.
TMH has a net worth of $18.4 billion and had revenues of $39 billion in 2009. It is also present in general insurance and asset management sectors, and offers other financial services. TMH had earlier entered the Indian general insurance space in 2000 through a partnership with Indian Farmers Fertiliser Cooperative Ltd (IFFCO).