Liberty Videocon to raise Rs.310 cr after new FDI rules
The Dollar Business Bureau
Mumbai-based Liberty Videocon General Insurance Co Ltd is looking for Rs.310 crore capital infusion as its international joint venture partner is going to raise its share stake to 49 percent, the ceiling under the recently revised FDI norms by the government for the insurance sector, a top company official said.
“We have applied to IRDAI (Insurance Regulatory and Development Authority of India) for 49 percent FDI. We are right now capitalised by Rs.680 crore. We are getting another Rs.310 crore. So, we will be close to Rs.1,000 crore as capital from Liberty, among the highest in general insurance space,” said Pankaj Arora, Country Head-Retail, Liberty Videocon General Insurance.
The capital will come from our foreign partner, increasing the shareholding to 49 percent, he said.
Arora further said that Liberty and Videocon have both invested in India to keep growing every year. We will witness some exponential growth in the coming years. We would be growing at a minimum of 80-100 percent in 2017 as a business.
With the company’s target to expand its network of branches to 80 in the next 2-4 months, he said that the intent is ‘very clear’ for India as the capital is already being lined up.
According to the plan, the additional branches will be set up in tier-2 and 3 cities as there is a very low penetration in these cities.
Arora stated that it has been three years, and yet the company is not profitable. But in the industry, most of the companies turn profitable in around 8-10 years. We would wish to improve it and should become profitable in 6-7 years.
The general insurance company is the joint venture between Videocon Industries of India and Liberty Citystate Holdings Pte, a part of the US-based Liberty Mutual Insurance Group.
The JV had started its operations in the country in 2013. Currently, it has a market share of 0.4 percent. It is looking to become one of the leading players in the business of general insurance.