Tokio Marine increases stake in IFFCO JV

Japanese Insurer Tokio Marine has hiked its stake in non-life insurance venture IFFCO-Tokio to 49% by acquiring additional shares in the company for Rs.2,530 crore. While Tokio Marine had 26% stake in the JV, IFFCO had 72.64% and Indian Potash Ltd (IPL) had 1.36%. “Tokio Marine has purchased total 6,19,43,945 shares of IFFCO-Tokio from IFFCO and IPL for a total consideration of Rs.2,530 crore,” said IFFCO Managing Director U.S. Awasthi. As per the agreement, IFFCO has transferred 5,82,81,173 shares of IFFCO-Tokio to Tokio Marine for Rs.2,380.4 crore while IPL sold 36,62,772 shares for Rs.149.6 crore. The shares of face value of Rs.10 per unit were sold at Rs.408.43 per share to Tokio Marine. IFFCO has earned about 20 times more than on its original investment. The three promoters—IFFCO, IPL and Tokio Marine—had invested Rs.560 crore in the company. Now the company is valued at Rs.11,000 crore. This transaction would help IFFCO raise the required capital to focus on more agri-businesses and to better serve the interests of Indian farmers in the fast changing agriculture sector, Awasthi said. IFFCO stake will come down to 51% in the joint venture while IPL would exit from the insurance company.