Bank of India has reduced its stake in Star Union Dai-ichi Life Insurance Company to 30% after it sold 18% holding in the company to its Japanese partner, Dai-ichi Life Insurance Company. The bank received Rs 540 crore for the transaction. Yhe holding of the Japanese company in the joint venture has now gone up to 44% becoming the single largest promoter of the company. The sale has been in terms of the joint venture agreement that the Japanese insurer would buy additional 18% state after liberalization of foreign direct investment norms. Girish Kulkarni, CEO of the company, said the transfer of shares was basis a pre-defined arrangement as outlined in the JVA. Star Union Dai-ichi Life Insurance Company is valued at Rs 800 crore at the end of March 2016 and the deal has happened at a multiple of 3.8 times at enterprise value, which is future profit of present value. This is the highest multiple paid by any foreign partner in the industry. The company had assets under management of Rs 5500 crore. It reported a profit of Rs 27 crore for 2015-16, with a total premium of Rs 1300 crore. The company operates through 11,000 branches of Bank of India and Union Bank of India. It has 82 branches and is planning to open another 18 this year.
