By: Chandrashekar Bhat
HINDUJA Group is believed to have partnered with the Abu Dhabi Investment Authority (ADIA) to buy Axa’s stake in Bharti-Axa Life Insurance.
Investment bank Jefferies has been hired to advise on the potential transaction and the due diligence process is expected to be completed early next year, Moneycontrol reported.
The Paris-based Axa, which has a significant presence in western Europe, North America and the Inda-Pacific region, holds a 49 per cent stake in the life insurance joint venture with Bharti Group. Bharti has a controlling shareholding in the entity which operates across India with 254 offices, selling life insurance products to groups and individuals.
However, it is not clear which entity of the London-based Hinduja conglomerate – which has a wide range of businesses ranging from automobile to healthcare – is involved in the negotiations.
Hinduja Group entity IndusInd Bank was involved in the Indian life insurance business in the past and sold policies of various companies at its branches.
The ADIA already has a footprint in the sector as the sovereign wealth fund was an anchor investor in the initial public offerings of ICICI Lombard, SBI Life Insurance and PolicyBazaar. It has also invested in the IPO of Star Health Insurance whose issue closed on Thursday (2) with a 79 per cent subscription.
Hinduja Group, Bharti-Axa and ADIA have not commented on the proposed deal.
While the share of life insurance in total premium was 46.34 per cent globally in 2019, the case was different in India. Life insurance accounted for 74.94 per cent of the total insurance business in the country, according to the Insurance Regulatory and Development Authority of India.
However, insurance penetration – measured as the percentage of insurance premiums to GDP – still remains low in India at 2.82 per cent, although it is better than the non-insurance sector’s 0.95 per cent, according to the insurance sector regulator.
