FDI In Metlife Likely To Cross 26%

Mumbai: GS Strategic Investments, a subsidiary of Goldman Sachs, is purchasing a 39.36 per cent stake in M Pallonji Enterprises Ltd (MPEL), which owns a 10 per cent stake in Metlife India Insurance Company. Metlife India is 74 per cent owned by Indian companies and 26 per cent by US-based Metlife. One of the promoters of Metlife India, the M Pallonji group, has accorded to divest a 39.36 per cent stake in its subsidiary MPEL to the Goldman Sachs unit, which indirectly gains a 3.9 per cent interest in Metlife India Insurance Company. Though FDI in insurance companies is capped at 26 per cent, the Insurance Regulatory and Development Authority (IRDA) does not take into account stakes held by foreign entities in the Indian promoter of an insurance company as long as the stakes are not held by the foreign partner in the insurance company itself. The decision to sell a stake by the M Pallonji group to Goldman Sachs was taken to augment capital flow to Metlife India Insurance Company. The promoters about a month ago invested Rs 350 crore of capital in Metlife India to take its total paid up capital to Rs 1,230 crore.