Royal Sundaram sells 40% stake to Ageas for ₹1,520 cr
MUMBAI: Private insurer Royal Sundaram General Insurance Ltd on Wednesday announced the sale of 40% stake to Ageas Insurance NV of Belgium for ₹1,520 crore.
Currently Sundaram Finance Ltd holds 75.9% in Royal Sundaram and proposes to divest 25.9%, thereby retaining 50% of its holding, post the divestment.
Some other existing Indian shareholders will hold the balance 10% in Royal Sundaram. The transaction is expected to close in the first quarter of 2019.
Royal Sundaram was founded as a joint venture between Sundaram Finance and Royal and SunAlliance Insurance Plc, UK. In July 2015, Sundaram Finance acquired the 26% equity holding from Royal and SunAlliance Insurance Plc. Mint was the first to report in November that Royal Sundaram was looking to divest a significant minority stake.
Royal Sundaram offers motor, health, personal accident, home and travel insurance to individuals and offers specialized insurance products in fire, marine, engineering, liability and business interruption risks to businesses.
It also offers products designed specifically for small and medium enterprises and rural customers.
“Over the past 18 years, Royal Sundaram has built a sterling reputation in the market for its customer service excellence, notably in claims management. The company has demonstrated strong growth in its chosen segments and is witnessing a rapid growth in its profitability. For the next phase of growth, we are delighted to be partnering with Ageas, whose global experience, including in several Asian countries, will be an asset,” TT Srinivasaraghavan, managing director, Sundaram Finance, said in a statement.
For the year ended March 31, Royal Sundaram generated gross written premium (GWP) of ₹2,643 crore and achieved a profit after tax of ₹83 crore.
Its GWP grew 19% between 2015 and 2018, while profit grew 56% in the same period, the statement said.
The insurer has a network of more than 5,600 agents and 700 branches, including those of Sundaram Finance.
“Partnering with Sundaram Finance, a well-established company with a vast knowledge of the Indian insurance market offers us a great opportunity to benefit from the potential of what is one of the world’s largest economies with an insurance industry that is expected to grow significantly in the coming years,” said Bart De Smet, chief executive at Ageas.