Abu Dhabi Investment Authority (ADIA), the sovereign wealth fund of the UAE, will invest ₹665 crore in Aditya Birla Health Insurance for a 9.99% stake, valuing the insurance company at ₹6,650 crore.
The boards of directors of Aditya Birla Capital and Aditya Birla Health Insurance have approved a proposal for a primary capital infusion of around ₹665 crore in Aditya Birla Health Insurance from a wholly owned subsidiary of the Abu Dhabi Investment Authority, according to the company's stock exchange filing.
Aditya Birla Health Insurance is a 51:49 joint venture between Aditya Birla Capital and Momentum Metropolitan Strategic Investments, a wholly owned subsidiary of South African based Momentum Metropolitan Holdings Ltd.
Upon the completion of the transaction, ADIA will own a 9.99% stake, Aditya Birla Capital will hold a 45.91% stake and MMH a 44.10% stake, respectively, in Aditya Birla Health Insurance.
The deal is subject to receipt of statutory and regulatory approvals, including the approval of the Insurance Regulatory and Development Authority of India (IRDAI).
The insurer plans to use this capital to drive its growth in the health insurance market in India. "This partnership with ADIA strengthens our resolve to further expand the company's 'Health-First' proposition, as we empower our customers to lead a healthy life," says Mayank Bathwal, chief executive officer of Aditya Birla Health Insurance. "We remain committed to this promise and have reimagined our business model and customer engagement accordingly, by creating differentiated products, a digital health ecosystem and a large distribution presence across the country. ABHI remains committed to grow the reach and impact of the nascent health insurance market in India," Bathwal adds.
Commenting on the deal, Hamad Shahwan Al Dhaheri, executive director of the private equities department at ADIA, says: "We see significant potential in India's health insurance sector as penetration levels increase, driven by higher awareness and broader economic growth. Aditya Birla Health Insurance has a strong management team, a wellness-first product offering and a differentiated distribution model. We look forward to partnering with Aditya Birla Capital and Momentum Metropolitan Holdings to support the next phase of ABHI's growth."
Vishakha Mulye, CEO of Aditya Birla Capital, says in recent times health has become a key concern for all. "With its differentiated health-first model, ABHI is well positioned to address this concern, while also protecting health through insurance. An investment from ADIA underscores the strong and unique business model of ABHI and the franchise we have created," says Mulye.
Shares of Aditya Birla Capital surged over 1% to ₹111.40 in the opening trade on the National Stock Exchange after the deal announcement.