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A Consortium lead by Rakesh Jhunjhunwala eyeing more stakes in Star Health Insurance – 28.10.2019

As per the report published in Economic Times on May 30, 2019

(i) Safecrop Holdings, a consortium of WestBridge Capital, Madison Capital and investor Rakesh Jhunjhunwala, is set to gain control of Star Health & Allied Insurance Co in what’s pegged as the sector’s largest M&A transaction in India. “The consortium of investors will acquire a controlling stake under the proposed deal for a total equity valuation of Rs 6,500 crore,” said V Jagannathan, chairman and managing director of the private health insurer.

(ii) The transaction will include a timeline for this, said people with knowledge of the matter. Star Health had a health insurance market share of 10.6% at the end of March 2018. The existing investors include promoter Star Health Investments, ICICI Venture, Tata Capital, and Oman Insurance Company among others. Jagannathan and some of his colleagues along with other individuals are also shareholders.

(iii) The consortium had invested Rs 350 crore in the company in December 2018. However, the valuation this time would be different.

(iv) The company had Rs 5,400 crore of new business with a profit of Rs 275 crore in FY18-19. New business registered a growth of about 30% growth, compared with Rs 4,161crore in the previous year.

(v) The Insurance Regulatory and Development Authority of India has approved the deal, Jagannathan said, for which an agreement was entered into last year.

1 Comment
  • Market Wizard
    1:19 PM, 28 October 2019

    It is a portfolio stock.

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