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July 23, 2001
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Money > Business Headlines > Report July 23, 2001 |
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Videocon shelves non-life insurance plunge planReeba Zachariah The Dhoots-controlled Videocon group has deferred its proposed foray into non-life insurance. Venugopal Dhoot, chairman and managing director of Videocon International said, "We have, at present, decided to put our insurance venture in cold storage." The group was earlier in talks with Banque Paribas, Allianz AG and the French major Axa Insurance for a possible alliance. However, it's understood that now Banque Paribas has tied up with the State Bank of India for life insurance, while Allianz has tied up with Bajaj Auto for life and non-life insurance. Explaining the rationale behind the change in plan, Dhoot said, "We had almost finalised our joint venture with an Australian company, but at present the partner does not want to enter India." Dhoot, however, refused to divulge the foreign ally's name. As per the insurance regulatory norms, a foreign partner can bring in 26 per cent of the capital requirement. Since the minimum capital needed is Rs 1 billion, while the Indian company will contribute Rs 740 million. The proposed insurance foray would have been a major diversification effort by the Rs 40 billion Videocon group, one of India's largest consumer electronics company, besides power, petroleum and ISP businesses. Explaining the rationale behind the company's risk foray, Dhoot had earlier told Business Standard, "The group has a long experience in dealing with consumers and, therefore, has a good understanding of the services sector." "We have given a tough fight to multinationals in the consumer durables segment and will do the same in the insurance sector," he said. "There is a lot of scope in general insurance since we have a strong distribution network. On the other hand, there are a lot of players in life insurance," Dhoot had then reasoned for not getting into life insurance. Powered by YOU MAY ALSO WANT TO READ:
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