Larsen& Toubro (L&T) – a well known Infrastructure and engineering company is planning to sell 49 per cent stake in its general insurance company to an overseas entity. The deal is anticipated to be finalized in the next three to six months.
L&T General Insurance Company is a completely owned subsidiary of L&T and among the few in the division without an overseas partner. The Insurance Laws (Amendment) Act of 2015 has allowed foreign direct investment (FDI) up to 49 per cent in insurance companies.
Earlier, only 26 per cent FDI was permitted. “The stake sale is primarily targeted at monetisation. The firm has been going it alone, so far and the aim is to bring in a foreign partner, which can bring in the requisite underwriting expertise and technological advancements,” an official said.
According to the sources, L&T should get roughly Rs 600 crore if it sells its stake at five to six percent of its property under management. Apart from monetization, L&T MF is looking at improving its distribution reach and is likely to sell stakes in a domestic bank.