The transaction values Aditya Birla Health Insurance Co. at approximately Rs 6,650 crore.
The boards of Aditya Birla Capital ("ABCL") and Aditya Birla Health Insurance Co ("ABHI") approved a proposal for a primary capital infusion of approximately Rs 665 crore in ABHI, from a wholly owned subsidiary of the Abu Dhabi Investment Authority ("ADIA").ADIA is a globally-diversified investment institution that invests funds on behalf of the Government of Abu Dhabi through a strategy focused on long-term value creation.
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 (together "MMH").
Completion is subject to receipt of statutory and regulatory approvals, including the approval of the Insurance Regulatory and Development Authority of India (IRDAI). Upon the completion of the transaction, ADIA will own a 9.99% stake, ABCL will hold a 45.91% stake and MMH a 44.10% stake, respectively, in ABHI.
ABHI plans to use this capital to drive its growth in the health insurance market in India. With its differentiated Health-First model, ABHI is the fastest growing health insurance company in the health insurance space, in India.
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Vishakha Mulye, Chief Executive Officer of ABCL said, "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."
Asokan Naidu, CEO of Momentum Metropolitan Affiliates said, "We are excited about the interest of an investor of the calibre of ADIA as it is a confirmation of the success of Aditya Birla Health Insurance, as well as a demonstration of the future growth potential of the company. We are grateful that MMH invested in India with a quality partner like Aditya Birla Capital Limited, and we are looking forward to building an equally valuable relationship with our new partner in this venture, ADIA."
Hamad Shahwan Al Dhaheri, executive director of the Private Equities Department at ADIA, said: "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."
Mayank Bathwal, CEO of Aditya Birla Health Insurance said, "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. 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."
Aditya Birla Capital (ABCL) is the holding company for the financial services businesses of the Aditya Birla Group. With subsidiaries that have a strong presence across Protecting, Investing and Financing solutions, ABCL is a financial solutions group that caters to diverse needs of its customers across their life cycle.
Aditya Birla Capital's consolidated net profit rose 42% to Rs 429.47 crore on 26% increase in revenue to Rs 5,859 crore in Q1 FY23 over Q1 FY22. The consolidated revenue of the company includes that of Aditya Birla Sun Life AMC and Aditya Birla Wellness.
Shares of Aditya Birla Capital rose 2.98% to Rs 108.75 on Thursday, 11 August 2022.
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