True North, one of the oldest private equity (PE) firms in India, has agreed to sell a significant part of its stake in health insurance company Niva Bupa, to its joint venture partner, Bupa, for around Rs 2,700 crore ($329.27 million), per an announcement.
Upon closing of the transaction, which is subject to Indian insurance regulator IRDAI’s approval, Bupa will become Niva Bupa’s majority shareholder.
True North is set to sell around 20% stake in the business to Bupa, increasing Bupa’s shareholding to approximately 63%. On approval, the share transfer will be one of the largest transactions in the Indian insurance industry by a global player since IRDAI permitted foreign entities to own up to 74% of an Indian insurer.
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.
In FY23, Niva Bupa became the third-largest retail health insurer, achieving more than Rs 4,000 crore in gross written premium (GWP). 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. Future growth options could also include the public listing of the business. The move comes as India’s insurance industry is experiencing strong growth amidst increasing awareness and demand for health insurance.
“Niva Bupa’s premium crossed Rs 4,000 crore last year, a significant increase from Rs 1,000 crore at the time of our initial transaction in 2019,” said Divya Sehgal, partner at True North in a release. “Niva Bupa’s market share has also more than doubled in this tenure,” he added.
“Our purpose… is to give every citizen of India the confidence to access the best healthcare,” added Krishnan Ramachandran, Managing Director and CEO of Niva Bupa.
True North recently made headlines for raising nearly $78 million (Rs 650 crore) for its new private credit fund, which sources told DealStreetAsia, will be eyeing investments in traditional manufacturing, established consumer, financial services, technology and healthcare businesses.
In the equity segment, True North is on the road to raising its seventh fund. While DealStreetAsia had last year reported that the corpus could be well over $600 million, the firm is now understood to be considering lowering the target corpus amid the current gloom in the world economy.
Its six separate investment funds have a combined corpus of $3 billion, including co-investments across sectors such as consumer, financial services, healthcare, and Technology. The firm counts Fedbank Finacial Services (Fedfina), Homefirst Finance, Cloudnine, and Infinity Fincorp, among its portfolio companies.