New Delhi, Oct 27: The plans of IFFCO-Tokio General Insurance Co Ltd, a joint venture between fertiliser major Indian Farmers' Fertiliser Cooperative and Japanese non-life Insurance company Tokio Marine and Fire Insurance, to launch their insurance products in the market in December may be delayed. This is because the Indian promoter has not been able to firm up equity pattern with its domestic associates.The Insurance Regulatory and Development Authority (IRDA) has asked IFFCO to submit proof of its capital infusion in the new venture.
The latest move by the regulatory authority has thrown a spanner into IFFCO-Tokio's earlier plans of launching the insurance product in the Indian market by December.
IFFCO had announced that the insurance company was expected to get its operating licence by November and start operations by December.However, the sources in the IRDA said, the failure on the Indian promoter's part for not submitting its equity break-up plan with the other domestic partners proposing to pick up stake in the joint venture company was responsible for the delay and approval was granted only `in principle'.
Kribhco and Indian Potash Ltd are likely to participate in IFFCO and Tokio Marine new venture.
When contacted, the general manager, projects and services of IFFCO, A.K.Kedia confirmed that the company had been asked to submit plan and pattern for mobilisation of capital of the Indian associates in the new project before commencing operations.
"We are in the final stage of negotiations with Kribhco and Indian Potash Limited, who have shown interest in picking up stake in the new venture and start operations in the last week of December, Mr Kedia said. Kribhco and Indian Potash Ltd will be offered 20 per cent and 5 per cent stake each, an agreement will be finalised soon ". Mr Kedia said.
"Our application is absolutely in order. Actually we have been told by IRDA that ours was one of the best applications in respect of the techno-finance details" Mr Kedia added.
Memorandum for the new venture was signed in May 2000 with a proposed initial capital of Rs 100 crore on 74:26 basis by IFFCO and Japanese company.
The new product will be a mix of existing and new range with a special focus on fertiliser industry introducing all risk policy for fertiliser units and urea distribution risk.
The company will use IFFCO's vast distribution network for marketing its insurance products comprising 35,000 cooperative societies across 22 state and two union territories.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.