ING Vysya Life Insurance Company (IVL) plans an aggressive expansion in business and hopes to raise its premium income to Rs5,000 crore by 2010, besides hiking its capital by Rs840 crore over the next three years.
The Rajan Raheja-controlled Exide Industries Ltd (EIL), which acquired a controlling stake in the life insurer about 18 months ago, plans to raise its equity in the company proportionately. According to S B Ganguly, chairman, EIL, and a director in IVL, the company had originally planned to invest about Rs400 crore in the IVL equity.
But now it plans to raise it to Rs700 crore over the next three years to back IVL's expansion plans. Of the additional Rs420 crore it plans to invest in IVL, Rs100 crore would be invested this year.
Exide will maintain its 50 per cent equity in the company. IVL's other promoters include the ING group of the Netherlands - which has a 26 per cent stake – and Gujarat Ambuja Cement (14 per cent) and Enam Securities (10 per cent).
IVL currently has a strong presence in the south, but plans to emerge as a national player soon. Kshitij Jain, managing director and CEO, IVL, says the company's branch network will be expanded to 320 by 2007, from 130 at present.
This year, the company expects premium income of Rs700 crore (as against Rs290 crore last year), which is likely to jump to Rs5,000 crore by 2010.
The company plans to double its market share to two per cent over the next three years. Jain plans to reduce the operational expenses from 60 per cent of revenues at present to 18 per cent over the next three years.
The Dutch group is eager to hike its stake in the company from 26 per cent to 49 per cent, and whenever the government brings in the necessary legislation, it will do so, says Jain. However, EIL is also keen to retain its 50 per cent stake, so the other two partners may have to sell off their equity to the ING group.
Ganguly points out that EIL's initial investment of Rs282 crore in 2005 was valued at Rs677 crore a year later, and has currently been revalued at Rs800 crore.