ADIA commits $83m to India's Aditya Birla Health Insurance
Abu Dhabi Investment Authority (ADIA) has agreed to invest INR 6.6bn (USD 83.5m) in India’s Aditya Birla Health Insurance (ADBHI) for a 10% stake.
ADBHI is a 51-49 joint venture between Aditya Birla Capital and South Africa’s Momentum Metropolitan Holdings. They will hold 45.9% and 44.1% positions following the closure of the transaction, which remains subject to various regulatory approvals.
The sale was approved by the boards of ADBHI and its listed parent on August 11. Aditya Birla Capital’s stock has climbed about 5% since the announcement, closing on August 12 at INR 110.7 for a market capitalisation of INR 268bn.
Health insurance accounted for 6% of Aditya Birla Capital’s total revenue of INR 204.5bn for the 2021 financial year. The company said it expected its health insurance operations to outpace the industry average in the current financial year, breaking even in the fourth quarter of 2022 barring a surge in claims due to COVID -19.
“We see significant potential in India’s health insurance sector as penetration levels increase, driven by higher awareness and broader economic growth,” Hamad Shahwan Al Dhaheri, executive director of private equity at ADIA, said in a statement. “Aditya Birla Health Insurance has a strong management team, a wellness-first product offering and a differentiated distribution model.”
ADBHI’s offering is considered relatively diverse, with products in less commonly addressed areas such as chronic care and incentivized wellness. Since its launch in 2016, it has established a distribution presence of branches and partner offices in more than 4,800 Indian cities.
Additional resources include 68,000 direct selling agents, 14 bancassurance partners and 17,000 bancassurance branches. There are also more than 40 digital partners that leverage some 50 different digital products to cover 6m people. Aditya Birla Capital said its health insurance renewal rate was 92% last year.
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