Aditya Birla Nuvo Ltd (ABNL), part of Kumar Mangalam Birla-controlled diversified business conglomerate Aditya Birla Group, has entered into an agreement with South African firm MMI Holdings Ltd to form a health insurance and wellness joint venture (JV) in India, the company said in a stock market disclosure.
This would mark an expansion in the insurance sector for Aditya Birla Group having forayed into life insurance sector in 2010 with Canadian JV partner Sun Life Financial Inc.
The new firm will be named as Aditya Birla Health Insurance Co Ltd (ABHICL) and ABNL will hold 51 per cent stake and rest 49 per cent will be held by MMI Holdings in it.
Last October, the two partners had inked an agreement to form a 74:26 JV. At that time, foreign investment in insurance sector was capped at 26 per cent. With the government hiking the FDI ceiling in the sector to 49 per cent, MMI had accordingly picked a bigger stake in the venture.
"ABHICL is making an application to the Insurance Regulatory and Development Authority of India for obtaining licence to start health insurance and wellness business operations. It is subject to regulatory approvals and the company expects to commence operations in 12-15 months," it said.
MMI Holdings is involved in long- and short-term insurance, asset management, savings, investment, healthcare administration and employee benefits and provides its services to all market segments through its operating brands Metropolitan and Momentum.
The Johannesburg-headquartered financial services group was formed through the merger of Metropolitan and Momentum in 2010.
Another South African financial services firm Sanlam has an exposure to the insurance market in India through a joint venture with Shriram Group.
The other Indian companies in the health insurance sector are Apollo Munich, Max Bupa, Star Health & Allied Insurance and Religare. Another recent entrant is Cigna TTK, a joint venture between US-based Cigna and India's TTK Group.
Other global companies too are reportedly looking to enter India's health insurance market; these include South Africa's Discovery and US-based Aetna Inc and Humana Inc.
ABNL is a diversified firm with presence across financial services, telecom, fashion & lifestyle, IT-ITeS and manufacturing businesses.
Shares of the company were trading at Rs 1711.60 each, down 0.61 per cent on BSE in a weak Mumbai market on Thursday at 2.52 PM.