Videocon may Exit Insurance JV with US’ Liberty Mutual

The $9-billion Videocon group has begun talks to exit the insurance JV it has with US-based Liberty Mutual. Videocon group, which has a debt pile of over Rs 40,000 crore, as per a report by a rating company, is working out the difference in valuation. "Videocon is in talks to sell its insurance business," said two sources close to the development. "The group is looking to focus on oil & gas, consumer electronics and power sector." Liberty Videocon's MD and CEO Roopak Asthana denied the development. Liberty Videocon General Insurance, the joint venture between Liberty  Citystate holdings PTE Ltd, a group company of US-based Liberty Mutual Group, and Videocon Industries BSE -0.58 %, started operations in 2013. Liberty Mutual Insurance initially held 26% stake in the joint venture. After the government raised FDI limit in insurance, Liberty Mutual Insurance increased its stake to 49%.

After the stake increase, the company's share capital is at Rs 950 crore. Liberty Videocon General Insurance is 14th in terms of premium income among private sector general insurance companies. There are 18 private sector general insurance companies which have close to 0.5% market share. The insurance industry has started seeing a lot of consolidation. HDFC Ergo acquired L&T General Insurance this year for Rs 551 crore, the first M&A in the insurance industry.