GIC to buy stakes of former subsidiaries
By Our Banking Bureau | 05 Aug 2002
New Delhi: General Insurance Corporation (GIC) has decided to buy out the stakes of its former and present subsidiaries. GIC will buy out the stake at a price of Rs 1.50 per share.
The
consolidation of stake by GIC is being done with a view
to increase its stake to more than 40 per cent in GIC
Mutual Funds and to provide cash flows to GIC Housing
Finance (GICHF).
With
the formal de-linking of its four general insurance subsidiaries
from GIC, the share of the corporation has come down to
20.4 per cent. As per the Securities and Exchange Board
of India regulation, GIC needs to have a minimum stake
of 40 per cent of the equity to qualify as a sponsor of
the asset management company.
Currently, GIC holds only 9.9 per cent. Another 10.5 per cent is held by GICHF. Each of the former GIC subsidiaries - New India, United India, Oriental and National - were holding 9.9 per cent each, taking the combined GIC tally to 60 per cent. The remaining 40 per cent is with the Soros group.
Further, the four insurance companies have no strategic interest in a mutual fund operation, as they are hard-core insurers and want to remain so.