Burmans setto give upcontrol of Aviva Life, plan to sell 25% stake

Deal may fetch Dabur owner ₹1,500 crore as it looks to raise funds for its core business

MUMBAI: The billionaire Burman family is set to pare its stake and give up control of a life insurance joint venture with UK’S Aviva Plc as part of its strategy to raise capital for the core consumer goods business, two people with direct knowledge of the matter said.

The deal will see the Burman family stake drop to 26% from the current 51% in Aviva Life Insurance Co., the people said, requesting anonymity. Aviva’s holding will rise to 74%, giving the foreign partner control of the life insurer.

“Going by the current actuarial valuations, the 25% stake to be augmented by Aviva could be worth at least ₹1,500 crore. The business is growing, and Aviva Life’s potential is huge, given the niche markets and customer segments in which Aviva Life has a better grip than other life insurers in India,” one of the two people said. according to Forbes rich list, has been looking to monetize its stake in Aviva Life for quite a few months and had also entered into stake-sale talks with e-commerce firm Flipkart’s co-founder Sachin Bansal. The talks, however, did not materialize because of differences over valuations and ownership terms, the second person said.

“Sachin Bansal of Navi Technologies held several rounds of discussions with the Burman family, negotiating the terms of the deal to buy the Burman family’s entire stake in Aviva Life,” the person said.

“This was last year. Discussions and negotiations with Bansal were over in March, and we were not able to come to any conclusion,” Mohit Burman said.

“Neither Bansal nor Navi is currently in talks to buy any stake,” said an official at Navi Tech seeking anonymity.

Meanwhile, Aviva, the world’s fifth-largest life insurer, seems to be upbeat about India’s insurance business potential. In 2016, soon after the government lifted the foreign direct investment limit in the insurance sector, Aviva picked an additional 23% in the life insurance venture from Dabur Invest Corp. for ₹940 crore. The deal valued Aviva Life at about ₹4,087 crore.