INSUBCONTINENT EXCLUSIVE:
MUMBAI: Private equity fund True North is likely to buy a 40 per cent stake in Royal Sundaram General Insurance for about Rs 1,300 crore, a
source close to the talks told ET
had shown interest in buying the company
Royal Sundaram declined to comment
A True North spokesperson said the fund has no comments.
Royal Sundaram General Insurance was formerly Royal Sundaram Alliance Insurance
Company Ltd, a subsidiary of Sundaram Finance
It was initially promoted as a joint venture between Sundaram Finance and UK-based insurer Royal Sun Alliance Insurance
In July 2015, Sundaram Finance acquired a 26 per cent equity holding from Royal Sun Alliance Insurance plc
It was a joint venture between Sundaram Finance Ltd and Royal Sun Alliance Insurance, UK, with Sundaram Finance holding 49.9 per cent and
Royal Sun Alliance 26 per cent of the equity share holding
Other Indian shareholders hold the remaining 24.1 per cent of the equity stake.
Royal Sundaram reported an increase of 19.86 per cent in
gross written premium at Rs 2,623 crore, compared with Rs 2,189 crore in the previous year
Profit after tax for 2016-17 was Rs 43.05 crore, as against Rs 26.70 crore in the previous year
The insurance regulator has allowed PE funds seeking to be promoters in insurance companies to invest through special purpose vehicles, with
a lock-in period of five years
In case of the PE investment through SPV, the minimum shareholding of promoters and promoter group should always be at 50 per cent of the
In cases where the minimum holding is less than 50 per cent, it should be maintained at those levels
PE firms have been buying stakes in insurance companies
Chennaibased Star Health Allied Insurance Company has many PE investors as its backer, including Apis Partners and ICICI Ventures
Recently, the regulator has given a licence to Catamaran to invest a large stake in Acko General Insurance.
