Health insurance firm Max Bupa said its stakeholders have agreed to increase the foreign participation limit from 26% to 49% in the venture.

As per the company, Bupa, which is the foreign promoter in the joint venture (JV), will pay around Rs 191 crore to its Indian partner Max India to increase its stake from the current limit to the desired one.

The deal is expected to come into force once all regulatory clearances have been sought, and will result in Bupa becoming the first foreign insurer to take advantage of the January 2015 decision by the central government to relax Foreign Direct Investment (FDI) participation rules for insurance companies.

According to the firm, Bupa and Max India have been working to align their JV agreements with the Insurance Laws (Amendment) Bill 2015 for Indian-owned and controlled businesses.

Also, the company said the new agreement will come into force after the requisite regulatory clearances have been secured from the Foreign Investment Promotion Board (FIPB) and the Insurance Regulatory and Development Authority (IRDA).

"Bupa's stake increase is a clear affirmation of the huge growth opportunity for health insurance in India," said Rahul Khosla, managing director of Max India.

According to Khosla, the cash received from the transaction will support growth aspirations of the Max Group, as well as for Max Bupa.

Launched in 2010, Max Bupa is the seventh-largest private health insurer in India with a base of more than 20 lakh customers.

The firm is a JV between multi-business corporate Max India Group and UK-headquartered global healthcare group Bupa.