HDFC ERGO makes L&T General Insurance shift in under its roof

India’s largest home lender owned, HDFC ERGO in an exchange filing informed about the completion of acquisition of L&T General Insurance for the enterprise value of Rs 551 crore.

HDFC ERGO, one of the largest private non- life insurance company is a Joint Venture between HDFC Limited and ERGO International, where HDFC holds the majority stake of 51 per cent whereas ERGO holds the rest 49 per cent.

Company in its press release stated that it has received the approvals from both the Insurance regulator IRDA (Insurance Regulatory Authority of India) and CCI (Competition Commission of India) for the acquisition.

Post necessary approvals L&T Insurance is proposed to be renamed as HDFC General Insurance Limited. HDFC General will operate as a wholly owned subsidiary of HDFC ERGO General Insurance Company Limited. Further to that both entities will now apply to the Bombay High Court for approval of scheme of amalgamation between the companies. 

In recent times Insurance sector has witnessed a whole lot of deals happening with foreign insurers increasing their stakes, consolidation among insurance players and major insurance companies approaching the primary market through the IPO route in order to list themselves on the exchanges.

India still remains an under penetrated market with insurance coverage of 3.4 per cent compared to that of the global average, thereby giving insurance companies huge market potential.