Homegrown private equity firm True North said that it has agreed to sell 20% of its stake in Niva Bupa, a health insurance company, to its joint venture partner Bupa, a UK-based healthcare services and insurance provider.
ET first reported on 23 June that Bupa was looking to pick up as much as 15-20% stake from True North.
True North is selling the 20% stake at a valuation of Rs2,700 crore, the PE firm said in a statement. The transaction is subject to insurance regulator IRDAI’s approval.
This transaction will mean Bupa becomes Niva Bupa’s majority shareholder, with its shareholding set to increase to approximately 63%. Foreign entities are permitted to own up to 74% in Indian insurance companies.
Bupa, an international healthcare company headquartered in the UK, was a founding shareholder when the business was first established in India in 2008. True North became Niva Bupa’s majority shareholder in 2019 after acquiring the stake held by Analjit Singh’s Max India.
In FY23, Niva Bupa became the third-largest retail health insurer, achieving more than Rs4,000 crore of gross written premium (GWP), the statement said
“True North believes that the time is right for Bupa to take a majority shareholding in the business to propel Niva Bupa to its next stage of growth,” the statement said.
Future growth options of the company could include a public listing of the business, it added.
“The company’s premium crossed 4000 crore last year, a significant increase from 1000 crore at the time of our initial transaction in 2019. Niva Bupa’s market share has also more than doubled in this tenure, a further testament to the firm’s exceptional management and its bright future,” said Divya Sehgal, Partner, True North.
Kotak Investment Banking acted as the exclusive financial advisor to True North and Niva Bupa, while Rothschild & Co advised Bupa on the transaction.