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MUMBAI (Reuters) - India's Exide Industries Ltd (EXID.NS) is in talks with Manulife Financial Corp (MFC.TO) as well as Samsung Life Insurance Co (032830.KS) to sell a 26 percent stake in its life insurance unit, two sources with direct knowledge of the matter said.
Exide has been looking for an equity partner in its life insurance business after Dutch banking and insurance group ING ING.AS sold its 26 percent stake in the joint venture to the Indian partner in January.
Exide is seeking capital for investment and the stake in ING Vysya Life Insurance Company Ltd may be valued at more than $100 million based on its premium income, the sources said.
They declined to be named as they were not authorized to speak to the media.
Exide, which makes automotive and industrial batteries, and Manulife declined to comment. A spokesman for South Korea's Samsung Life said the company is currently not considering the asset as a "prospective buy."
ING Vysya posted its maiden profit of about 231 million rupees ($3.8 million) in the last financial year that ended on March 31, according to the company filings, more than a decade after it had launched operations.
"The business has turned around now and the company has been gaining market share," one of the sources told Reuters. "It's one of the last few options available for a foreign insurance company to tap the Indian market."
Indian laws limit foreign ownership in domestic insurers to 26 percent. Government approval for a proposal to raise the holding to 49 percent has been pending for a long time due to fierce political opposition to the move.
Despite the ownership restrictions, many overseas insurance companies are attracted by the long-term prospects of Asia's third-largest economy, especially as growth in some developed markets slows.
Life insurance penetration in India is about 3.4 percent of gross domestic product in terms of total premiums underwritten in a year, much lower than 8.8 percent in Japan and 8.7 percent in Britain.
The insurance industry is currently dominated by Life Insurance Corp of India, a state-owned firm that once held a monopoly and which now has 74 percent of the market.
Foreign insurers including Britain's Standard Life (SL.L), Canada's Sun Life, Prudential (PRU.L), Japan's MS&AD (8725.T), Italy's Generali (GASI.MI) and Dutch insurer Aegon (AEGN.AS) operate in India through joint ventures with local companies.
Manulife was earlier this year said to be one of the suitors for HSBC Plc's (HSBA.L) 26 percent stake in an Indian life insurance joint venture with two Indian state-run banks.
The HSBC Indian insurance stake sale has now stalled due to differences with its Indian partners, prompting Manulife to scout for other investment opportunities, another source said.
Additional reporting by Joyce Lee in SEOUL and Clare Baldwin in HONG KONG; Editing by Miral Fahmy