DLF, Prudential to invest Rs 200 cr in insurance JV

DLF, Prudential to invest Rs 200 cr in insurance JV
The Economic Times, July 15, 2009, Page 10

Paramita Chatterjee NEW DELHI

REAL estate firm DLF and its US partner Prudential Financial are looking to infuse Rs 150-200 crore to boost the operation of their Indian life insurance joint venture DLF Pramerica, a senior executive of the JV company told ET.

Of the total capital proposed to be infused, DLF would contribute 74%, while the remaining would come from its foreign partner. Two-yearold DLF Pramerica, a 74:26 JV between DLF and Prudential Financial, currently has a capital base of Rs 130 crore.

The JV firm plans to foray into tier II and tier III cities in the country and recruit around 1,500 agents besides 50-100 managers by the end of this fiscal. DLF Pramerica at present has around 600 employees and 450 agents.

“Insurance is a capital intensive sector and has huge fund requirements. India has immense potential as the life insurance penetration here is still very low when compared to other countries. We are looking at investing further to increase our presence,” said Prudential Financial senior vice-president and co-president, international insurance business, Timothy Feige.

Prudential Financial has said that it will increase its stake in the JV to 49% as soon as the government raises the foreign direct investment(FDI) ceiling in the sector. Currently, FDI in the insurance space is capped at 26%. “We are waiting for the Insurance Bill to be passed by the government. Once the regulatory hurdles are cleared, we will increase our holding,” said Mr Feige.

A small player in the insurance industry, DLF Pramerica has offices in Haryana, Punjab and the National Capital Region and wants to ramp up its presence in the northern region before foraying into south India.