TII invests Rs 55.5 cr in Chola MS Insurance

CHENNAI: Tube Investments of India ( TII), part of Murugappa group, informed stock exchanges on Thursday it has invested Rs 55.55 crore towards subscription to the equity shares of Rs 10 each of Cholamandalam MS Insurance Co offered at par on rights basis.

Last month, Chola MS Chola MS) announced it plans to enhance its capital base by infusing Rs. 75 crore through a rights issue. It is a 74: 26 joint venture between the Murugappa Group and Mitsui Sumitomo Insurance Group, the second largest Insurance group in Japan. The balance equity is being put in by the Japanese partner.

The fresh equity infusion, which took place after six years, has increased its equity capital from Rs. 142 crore to Rs. 217 crore and authorised capital from Rs. 205 crore to Rs. 250 crore. This will help the JV to improve its available solvency margin.

With industry growth largely happening in motor and health segments, it has enhanced its capital base to support its growth plan in these two important segments.

Last month, TII and DBS Bank of Singapore, as promoters, pumped in Rs 150 crore each into Cholamandalam DBS Finance, a non-deposit taking NBFC engaged in asset financing.
Chola DBS is a 50:50 joint venture between Murugappa group and DBS. Both TII and DBS Bank subscribed to the 1% fully convertible cumulative preference shares (FCCPs) of Chola DBS being issued on preferential basis.

The FCCPs are convertible into equity shares within a period of 18 months from the date of allotment.