Kedaara invests $28m in Indian health insurer
Indian private equity firm Kedaara Capital invested INR2 billion ($28 million) to acquire a minority stake in the healthcare insurance unit of Religare Enterprises.
According to a filing by Religare, Kedaara will take an initial 6.7%, with an agreement to double its holding once regulatory approval comes through. As a result, Religare Health Insurance (RHIL) will be valued at INR59.7 billion.
RHIL was formed in 2012 by a consortium comprising Union Bank of India, Corporation Bank, and the parent company. Religare Enterprises is a financial services company that offers loans to small and medium-sized businesses, affordable housing finance and runs retail brokerages. Its health insurance unit offers coverage via travel and health-related insurance plans alongside separate ones covering rare illnesses and personal accidents.
It is one of seven private non-life insurance providers operating in the health, travel and personal accident segment. According to the industry regulator’s annual report for 2019, RHIL is second only to Star Health by number of agents but it has fewer offices than Apollo Munich. Net premiums grew by 60% to INR10.9 billion but claims grew by 70.6% to INR6 billion in the most recent financial year.
The fresh capital is expected to go towards paying off debt held at the parent level while some of the funds will also be invested in supporting the health insurer’s activities.
“Religare Enterprises has been going through difficult times in the recent past and the new management has been taking important steps to not only strengthen corporate governance practices and compliances, but also capitalize the businesses for future growth,” said Rashmi Saluja, non-executive chairperson at Religare Enterprises. “Our health insurance business is well capitalized to grow its market share and is poised to achieve a market leader position soon “
In the past 12 months, True North acquired majority control of Max Bupa, RHIL’s industry peer. Other PE investors have targeted insurance technology specialists like Acko General Insurance and Coverfox.
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