Hindujas in talks with global majors to drive into insurance

NEW DELHI: The $2-billion Hinduja Group is in talks with a couple of global insurance companies for rolling out its insurance venture here. “The Hinduja group is keen on the insurance sector and we are working on plans for that business. There are quite a few global insurance companies that are not in India yet and are keen to come in. We are exploring various options, but it’s still in the very early stages,” Ashok Leyland vice-chairman Dheeraj G Hinduja told ET. The insurance business, which already has some big automotive names such as Bajaj and Maruti, has been booming in India. Total premium in the insurance sector, which stands at Rs 75,000 crore in 2006-07, witnessed 110% growth over the previous year. Industry experts say the sector will continue to witness similar growth rates for the next 2-3 years. Insurance penetration as a percentage of GDP has risen from 2% a few years ago to 3.2% in 2006-07. Cash-rich auto companies such as Bajaj and Maruti already have a presence in insurance, though in different formats. Bajaj Auto has a JV with German financial company Allianz in which the latter holds 26% with an option to raise it to 49% if the government allows. Maruti, meanwhile, has separate arms that have tie-ups with National Insurance, Bajaj Allianz, New India Assurance and Royal Sundaram. The Hinduja Group has interests in various sectors, including banking, finance, energy, automotive, IT and real estate. IndusInd Bank is the group’s largest company in the financial space. Its foray into insurance will be the group’s second most important venture in the financial sector since the inception of IndusInd Bank. FDI regulations allow foreign investors to hold 26% stake in insurance ventures, with the remaining 74% being held by Indian investors. The insurance foray is part of the group’s new aggression across the sectors it is present in. For instance, Ashok Leyland, India’s second largest truck and bus maker, is open to tying up with an overseas player after long-time partner Iveco moved to Tata Motors as part of its arrangement with parent Fiat. “We are open to a partnership,” said Mr Hinduja. “If someone brings an idea or technology that adds value to Ashok Leyland, we will consider it. But not at the cost of giving up majority control.” Ashok Leyland would also look at acquisitions in the commercial vehicle, auto components and engineering and design space, he said. “We are open to even big-ticket acquisitions in any of these sectors, but only if there are synergies with Ashok Leyland in the markets we want to be in,” Mr Hinduja said. The company is looking for CV acquisitions in Europe and components and engineering/services cherries in the US, he said.

Source: NANDINI SEN GUPTA & GAURIE MISHRA(TIMES NEWS NETWORK)