Kotak Mahindra Bank Ltd. announced on Wednesday that it has obtained approval from the Reserve Bank of India to divest 70% stake in its general insurance subsidiary to Zurich Insurance Co.
In November 2023, Zurich Insurance revealed its intention to acquire 51% share in Kotak General Insurance Co. through a mix of capital investment and share purchase.
This would be followed by the acquisition of an additional 19% stake within three years of the initial purchase, amounting to Rs 5,560 crore.
"...the Reserve Bank of India has, vide its letter dated June 4, 2024...conveyed its approval for the transaction. All regulatory approvals required for the transaction have now been received," Kotak Mahindra Bank said in a regulatory filing.
Shares of Kotak Mahindra Bank closed up 4.89% at Rs 1,718.75 apiece, over the previous close on the BSE.
Kotak Mahindra General Insurance is a wholly owned subsidiary of Kotak Mahindra Bank.
As per the current regulatory guidelines, a foreign entity can own up to 74% in an insurance venture in India.
Earlier this month, the Competition Commission of India approved the acquisition of 70% stake in the insurer by Zurich Insurance.
The acquirer is a wholly owned subsidiary of Zurich Insurance Group. It is a leading multi-line insurer serving people and businesses in more than 200 countries and territories.
(With inputs from PTI)
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