Mumbai:
At Rs 536 per share, HDFC Bank has picked up a stake of 4.99 per cent in HDFC ERGO General Insurance Company and has paid a total amount 1,906.43 crore for buying 3,55 crore equity shares from its promoter HDFC.
The bank has been a distribution partner of HDFC ERGO since 2009.
The transaction, indicative to be closed by September this year, will require approval from insurance sector regulator Irdai and banking regulator RBI. Any other necessary regulatory or government approval will be evaluated prior to the share purchase agreement, HDFC Bank said.
In Fy 2021, the gross written premium and net-worth of HDFC ERGO was Rs 12,443.93 crore and Rs. 2,926.86 crore respectively.
For FY 2020-21, in terms of Gross Direct Premium Income) and has network of 203 branches in India,
With market share of 6.2 per cent, HDFC ERGO has been one of the fastest growing private General Insurers in the country, having grown its gross written premium at a 35 per cent CAGR over the last 13 years.
The proposed transaction will enable the bank to participate in the growth opportunity of HDFC ERGO and augment HDFC ERGO’s growth prospects leading to long-term value, said HDFC Bank in its stock exchnage filing.
HDFC ERGO is a joint venture between HDFC Limited and ERGO Group AG, the primary insurance entity of the Munich Re Group of Germany.