Private equity major KKR has acquired 9.95 per cent stake in Max Financial Services, becoming the latest global player looking to grab a share in the Rs 3.5-lakh crore Indian life insurance sector.
Max Financial Services is the newly demerged entity of the Max Group that owns an approximate 72 per cent stake in Max Life, country's fourth-largest private life insurance player.
KKR acquired stake from a sponsor group led by Analjit Singh, Chairman Emeritus of Max Group, it said in a statement.
The investment was made from KKR's Asian Fund II through the portfolio investment route, it added. However, further details of the transaction were not disclosed.
"We continue to believe in India's growth potential, increase in financial savings and resultant life insurance industry growth. Within the sector we are excited to partner with Analjit Singh and his team at Max Financial Services, a company which is well positioned in the life insurance industry," KKR India CEO Sanjay Nayar said.
JM Financial executed the deal on behalf of both parties.
"KKR has been a long-standing, value-added partner to Max Group across various business initiatives. The extension of our partnership couldn't have happened at a more opportune time than now, following the listing of Max Financial Services which creates an unparalleled platform to invest in the Indian life insurance space," Singh said.
Last month, Max Group split the company through a demerger into three separate listed companies -- Max Financial Services for life insurance; Max India for health care, health insurance and allied businesses; and Max Ventures and Industries for manufacturing activities.
The partnership between KKR and Max Financial Services comes as the Indian life insurance sector steadily recovers from a recent slowdown and is poised for robust growth, the statement said.
Earlier, Japan's Nippon Life Insurance agreed to increase stake in Reliance Life Insurance (RLIC) to 49 per cent for Rs 2,265 crore. Besides, Canada's Sun Life's had decided to raise stake in Birla Sun Life Insurance to 49 per cent, while Singapore's Temasek picked share in ICICI bank's life unit.
It observed the life insurance as a product category is significantly under-penetrated in India versus some of its Asian peers.
"India's increasing workforce, a rise in the country's median age and favourable savings trends are all expected to drive insurance growth," it said.
