Indian payments firm Paytm, owned by One 97 Communications Ltd. along with its founder Vijay Shekhar Sharma, is set to acquire Mumbai-based private sector general insurer Raheja QBE for ₹568 crores to fast track the launch of its insurance operations by 24-30 months.
Paytm, which earlier was also a distributor of insurance, now plans to manufacture general insurance products for this consumers, through this acquisition.
The acquisition is subject to customary conditions, including approval from the Insurance Regulatory and Development Authority of India (IRDAI).
Raheja QBE is owned 51% by Prism Johnson and 49% by QBE Australia. Paytm is set to acquire both stakes and would own 100% of the company. All employees of Raheja QBE would continue working at Mumbai and other locations.
This strategic acquisition is through QorQl Pvt. Ltd, a technology company with majority shareholding of Vijay Shekhar Sharma and remaining held by Paytm.
“It is an important milestone in Paytm’s financial services journey, and we are very excited to welcome Raheja QBE General Insurance into the Paytm family. Its strong management team will help us accelerate our journey of taking insurance to the large population of India with the aim to create a tech-driven, multi-channel general insurance company with innovative and affordable insurance products,” said Amit Nayyar, President at Paytm.
In February, 2018, Paytm incorporated two new entities — Paytm Life Insurance Corporation Ltd. and Paytm General Insurance Corporation Ltd– for kick starting its operations in the insurance space.
Earlier in April, this year, Paytm named Vineet Arora as the managing director and chief executive officer of Paytm General Insurance Ltd.
Through this acquisition, Paytm plans to leverage its merchants and customers to build innovative insurance products to accelerate its reach and adoption.
“Today’s announcement marks both a continuation of QBE’s strategy to simplify our business and the beginning of a new & exciting chapter for our strong team at Raheja QBE,” said QBE Australia Pacific chief executive officer, Vivek Bhatia.
“We are happy to announce the sale transaction of our entire 51 percent stake in Raheja QBE General Insurance Company Limited. Our decision to sell our stake in Raheja QBE is in line with our mission to create sustainable shareholder value and will enable us to focus our resources on our core businesses. This move will help the insurance business scale up to new heights by leveraging the large customer base and innovative products offered by Paytm,” said Vijay Aggarwal, managing director, Prism Johnson Ltd.
