Aug 18: Safecrop Holdings Pvt. Ltd., a consortium formed by private Equity firms WestBridge Capital and Madison Capital along with billionaire investor Rakesh Jhunjhunwala, has agreed to acquire Star Health and Allied Insurance Company Ltd.
The consortium will buy shares from Star Health Investments Pvt. Ltd. along with funds managed or advised by ICICI Venture, Tata Capital, and Apis Partners. Promoter investors ETA Group and the rest will sell their stake of 43.67% in the health insurance company. Kotak Investment Banking and Singapore-based Evercore and Mizuho Securities were the advisers to the deal.
The financial details of the deal haven’t yet been disclosed. However, people close to the matter say that the insurer has been valued at around Rs 6500 crore. Star Health and Allied Insurance has been on the block since October.
With a share of 10.6% in the health insurance market, Star Insurance is the largest standalone health insurer in India. The company also had a 45% rise in profit on a yearly basis to Rs 171 crore during the previous financial year. The net worth of Star Health stood at Rs 960 crore during the period.
Acquisition of the market leader will help further penetration into the health insurance market, said WestBridge Capital co-founder and managing director at Sumir Chadha.
Chadha has also been quoted as saying that a healthy pace for the growth of retail health insurance industry in the country that will be driven by the penetration into the market would be ushered in. Speaking about the acquisition, he said that it was well in line with the investing philosophy of WestBridge.
Star Health chairman and managing director expressed hope in the new investors, adding that the vast experience of the investors will help the company to grab new heights in the industry.