Each of our investors brings a wealth of expertise across various dimensions of our business and possesses a profound understanding of the insurance ecosystem,Divya Sehgal, Partner, True North
A clutch of investors including Singapore based global investment company Temasek, India Business Excellence Fund IV [MO Alternate Investment Advisors] and Paragon Partners Growth Fund II are set to buy out a minority stake in Niva Bupa Health Insurance Company by investing around Rs 800 crore in the company.
The deal is subject to regulatory approval from the IRDAI.
Earlier, Indian private equity firm True North had agreed to sell 20 per cent of its stake in Niva Bupa, to its overseas joint venture partner, Bupa, for around Rs 2700 crore [around £267m GBP equivalent], subject to IRDAI approval.
Post this transaction, Bupa will become Niva Bupa’s majority shareholder and valuation of the company is now at Rs 13,500 crore.
Bupa’s shareholding in the Indian health insurance company would be around 63 per cent after True North sells its 20 per cent stake. .
On approval, the share transfer from True North will be one of the largest transactions in the Indian insurance industry by a global player since the IRDAI permitted foreign entities to own up to 74 per cent of an Indian insurer.
Divya Sehgal, Partner, True North said, “The growth in Niva Bupa health insurance is a result of synergies between True North and Bupa, along with our co-investors in our holding vehicle, Fettle Tone and the positive role played by Faering Capital over the life of the investment. We are now pleased to welcome new investors who will join us in Niva Bupa’s ongoing journey. Each of our investors brings a wealth of expertise across various dimensions of our business and possesses a profound understanding of the insurance ecosystem. This latest injection of capital will play a pivotal role in propelling the company towards its long-term ambitions and strategic objectives.”
True North had earlier said that future growth options for the company, in which it continues to hold a minority stake, could also include the public listing.
Krishnan Ramachandran, MD & CEO of Niva Bupa Health Insurance said, “India offers tremendous growth opportunity for the health insurance industry. Our existing joint venture partners, along with the new set of investors who are coming on board, are excited about the market potential and are committed to working with us to democratize health insurance in India.”
Kotak Investment Banking is the exclusive financial advisor to True North and Niva Bupa.
Niva Bupa became the third largest health insurer in the country in FY23, with a gross written premium of Rs 4,000 crore, as against Rs 1,000 crore in 2019, and has a presence in nearly every district of India.