City-based Star Health & Allied Insurance Company Ltd., the country’s first standalone health insurance firm, is set to change hands.
Safecrop Holdings Pvt. Ltd., a consortium comprising WestBridge AIF, Rakesh Jhunjhunwala and Madison Capital, has signed definitive agreements with the shareholders of Star Health & Allied Insurance Company Ltd. to buy out their shares in Star Health.
Existing shareholders of Star Health include Star Health Investments Pvt. Ltd. and funds managed or advised by ICICI Venture, Tata Capital and Apis Partners.
The deal size is reported to be in the vicinity of $ 1 billion.
Top sources confirmed the deal but would not comment on the financial details of the deal.
The transaction is subject to necessary regulatory and other approvals.
Kotak Investment Banking, Evercore and Mizuho Securities (Singapore) acted as the financial advisors to Star Health and its shareholders. Nishith Desai Associates and Trilegal acted as advisors for the purchasers and Platinum Partners acted for the company.
Largest health insurance company with a market share of 10.6% in health insurance across all the general insurance companies in India as on March 31, 2018, Star Health was founded in 2006. It provides health insurance, overseas mediclaim and personal accident policies. It employs 11,000 people providing insurance coverage to one crore lives as on March 31, 2018.
According to information contained in its website, Star Health has a pan-India distribution platform and an integrated ecosystem to tap the retail health insurance opportunity with 434 branches/offices, 2.4 lakh agents and tie-up with 8,500 network hospitals.
Chairman cum Managing Director, V. Jagannathan, said that the transaction was between the shareholders and the buyer. And, hence, no money would accrue to the company.
The company has a written a direct premium of ₹ 4,161 crore (41% YoY growth) with profit after tax of ₹ 171 crore and a networth of ₹ 960 crore as on 31st March, 2018
Mr. Jagannathan pointed to the humble beginning of Star Health. “We feel new investors, with their abundance experience and golden touch, will enable the company to scale further heights,.” he added.
Star Health, he said, was confident that the retail health insurance industry would 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 confident of Star’s business model and believe that it will continue to lead the retail health insurance space,” said Sumir Chadha, Co-Founder & Managing Director, WestBridge Capital, in a statement.
“The management of Star Health has built its leadership position in private health insurance through innovation, perseverance and excellence. I believe health insurance is a key tool for every citizen towards financial stability. I am proud to be associated with Star Health and believe it is best equipped to serve the country’s health insurance needs,” said Rakesh Jhunjhunwala.
