Calcutta, May 28: Gujarat Ambuja Cements Limited has decided to acquire the entire 14.87 per cent stake of ING Vysya Bank in ING Vysya Life Insurance for Rs 60.9 crore.

“The decision to invest in ING Vysya Life was based on its rapid expansion and our belief that it will continue to build on this growth by leveraging the global expertise of the ING group's sizeable insurance operations,” Anil Singhvi, whole-time director of Gujarat Ambuja Cements (GACL), said.

“We wanted to be a part of ING Vysya Life at a time when the private insurance sector in India is growing rapidly. The industry's premium income grew 129 per cent in 2004-05.”

The deal is subject to the approval of the Insurance Regulatory and Development Authority (IRDA) and other relevant regulations.

On completion, this will result in a one-off gain of Rs 22.9 crore for the financial year ending March 31, 2006.

Frank Koster, managing director and chief executive officer of ING Vysya Life, said: “We have grown considerably over the last three years. A shareholder like GACL will benefit the company.”

“The shareholding pattern of the other stakeholders shall remain the same. The ING group will continue to hold 26 per cent, the maximum limit currently allowed under the FDI regulations,” said Gautam Sharma, vice-president and head of marketing of ING Vysya Life.

Other stakeholders include the GMR group, which owns 48 per cent and Enam group, which has 10 per cent.

GACL will have a representative on the current nine-member board of directors of ING Vysya Life, added Sharma. He said the bank’s rationale behind selling its stake in the insurance business was to focus on its retail distribution network.

Since the company's insurance products will continue to be distributed exclusively through the bank, such an arrangement will also benefit the insurance company, he added. The bank's extensive rural branch network will continue to support the development of ING Vysya Life's rural business.

ING Vysya Life’s premium income has grown 312 per cent in 2004 and is now ranked eighth among private sector players as on March 31, 2005.

For the quarter ended March 31, GACL reported net sales of Rs 667.42 crore and a net profit of Rs 143.11 crore. As of May 13, it has a market capitalisation of Rs 8,000 crore.

The company operates six cement plants and three grinding plants, with a current capacity of 14.5 million tonnes per annum. It is also the largest exporter of Indian cement to Sri Lanka, Dubai and Kuwait.

ING Vysya has three businesses in India: ING Vysya Bank, ING Vysya Life Insurance and ING Vysya Mutual Funds. ING Vysya is part of the ING group.