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20 Aug 2018
 |
| Rakesh Jhunjhunwala (The
Total Investment & Insurance Solutions) |
Ace investor Rakesh Jhunjhunwala along with a
consortium of private equity firms WestBridge Capital and Madison Capital have
agreed to buy Chennai-based Star Health Insurance. While the financial details
of the deal have not been disclosed, a Bloomberg report estimates the deal
value at just under $1 billion, i.e, about Rs 6,500 crore. The Total Investment & Insurance
Solutions
The consortium has signed definitive agreements with the
shareholders of Star Health & Allied Insurance Company to purchase their
shares in Star Health, India’s leading standalone health insurer. Earlier, it
was reported that Rakesh Jhunjhunwala was in contention with several other
financial investors. According to a CNBC TV18 report, Rakesh Jhunjhunwala will
be a promoter of Star Health with 35% stake in the company. Further, Safecrop
Holdings will be the new owner of Star Health- Safecrop Holdings comprises of
WestBridge AIF, Rakesh Jhunjhunwala, Madison Capital, sources told the channel.
Interestingly, ICICI Lombard General Insurance had placed a bid
amount of about Rs 5,800 crore, which fell short of Rakesh Jhunjhunwala-led
consortium’s bid of approximately Rs 6,500 crore. So the valuation aspect of
this particular transaction went in favour of the consortium led by Rakesh
Jhunjhunwala, said CNBC TV18 report. The Total Investment & Insurance
Solutions
The existing shareholders of Star Health include Star Health
Investments and funds managed or advised by ICICI Venture, Tata Capital
and Apis Partners. The transaction is subject to regulatory and certain other
approvals, a statement by Star Health said. The Total Investment & Insurance
Solutions
Notably, Star Health has a market share of 10.6% in health
insurance space in India as of March 31, 2018. The company was founded more
than 11 years ago in 2006 and provides health insurance, overseas mediclaim and
personal accident policies. The investors are bullish on the prospects of Star
Health Insurance in the retail health insurance space. The Total Investment & Insurance
Solutions
“We are really excited about Star Health, a dominant market leader
in the retail health insurance industry. We believe the retail health insurance
industry will continue to grow at a healthy pace in the coming decade, driven
by increasing penetration. This aligns well with WestBridge’s investing
philosophy and long-time horizon. We are highly confident of Star’s business
model and believe that Star will continue to lead the retail health insurance
space” Sumir Chadha, co-founder & MD, WestBridge Capital noted. Currently, Star Health
Insurance employs 11,000 people providing insurance coverage to more than 1
crore lives. Star Health has a robust distribution platform and an integrated
ecosystem to tap the retail health insurance opportunity with 434 branches and
offices, 2.4 lakh agents and tie-up with 8,500 network hospitals.
“We have started from a humble beginning and have come to this
level with an excellent team work. We feel new investors, with their abundance
experience and golden touch, will enable the company to scale further heights,”
Jagannathan, chairman-cum-MD of Star health Insurance said.The
Total Investment & Insurance Solutions
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