Paytm will acquire general insurance company Raheja QBE in a deal worth around $76 million, or Rs 570 crore.
The online financial services provider said on Monday that founder Vijay Shekhar Sharma’s QorQI Technology will acquire 100% stake in the insurer from parent companies – Prism Johnson and QBE Australia – who are both seeking to exit from the joint venture.
Sharma, who owns 51% stake in QorQI, will hold the same stake in Raheja QBE as well, with the remaining 49% owned by Paytm’s parent One97 Communication, a person aware of the matter told ET.
India’s Prism Johnson holds 51%, while QBE Australia has the rest in Raheja QBE.
The deal is subject to approvals from India’s insurance regulator, Paytm said in a statement.
If approved, the acquisition will allow the Alibaba-backed fintech player to sell its own insurance products and develop into a full-fledged financial services company.
The Noida-based payments player was earlier considering applying for a general insurance license, but the acquisition is expected to speed up the process.
“We took the acquisition route to accelerate our journey into general insurance. This would help us save between 24-30 months,” said the Paytm spokesperson cited above. “The company’s strong management team would also help us in faster expansion of the insurance business.”
Paytm already has a broking license which allows subsidiary Paytm Insurance Broking to market and sell products in partnership with licenced insurers. The insurance brokerage would continue selling products in tie-ups on its platform, they said.
As per sources, Pankaj Arora, the current CEO of Raheja QBE General Insurance will continue to lead the business with Amit Nayyar, President Paytm, and Vineet Arora, CEO of Paytm General Insurance Limited will be responsible to oversee the expansion.
“(Raheja QBE’s) strong management team will help us accelerate our journey of taking insurance to the large population of India with the aim to create a tech-driven, multi-channel general insurance company with innovative and affordable insurance products,” Nayyar said in a media statement.
The Mumbai-based insurer is expected to continue operating from the country’s financial capital as well as other locations, it said.
“We are happy to announce the sale transaction of our entire 51% stake in Raheja QBE,” said Vijay Aggarwal, managing director of Prism Johnson. “Our decision…is in line with our mission to create sustainable shareholder value and will enable us to focus… on our core businesses.”
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