Key Takeaways:
British insurer Aviva agreed to purchase the remaining 26% stake in its Indian life insurance joint venture from Dabur Invest Corp, taking full ownership of a business it first established in 2001 after New Delhi raised the foreign direct investment cap in the sector to 100%.
The acquisition follows India's landmark reform that increased the FDI limit in insurance to 100% of paid-up equity capital from 74%, the company said Thursday. Aviva had previously raised its shareholding to 49% in 2016 and then to 74% in 2022 after similar regulatory changes.
"The company was not really growing. It was largely managing its solvency position," said a person familiar with the matter. "Full ownership should provide greater strategic flexibility and enable faster decision-making."
Aviva India managed assets of about 163.2 billion rupees ($1.71 billion) as of March 31 and reported premium of 13.4 billion rupees for fiscal 2026, up 2.8% from the prior year. New business premium grew 10% to 3.5 billion rupees. Profit after tax, however, declined 21.7% year-on-year to 841.5 million rupees. The insurer's solvency ratio stood at 188%, comfortably above the regulatory requirement of 150%, while shareholders' funds were 8.8 billion rupees.
Aviva did not disclose the price of the acquisition and said its financial impacts are not material to the London-based company. The deal marks the first full buyout of an Indian insurance joint venture under the liberalized foreign ownership policy, which was notified in May. Total ownership will allow Aviva to allocate growth capital to one of the world's least-insured nations, where state-run Life Insurance Corp still dominates nearly three decades after deregulation. The acquisition ends Dabur's more than two-decade association with the insurer.
This article is for informational purposes only and does not constitute investment advice.
