A deal will help the promoters clear more than 70 per cent of the `1,750 cr they had raised by pledging shares Reddys have invested `300 cr in Apollo Munich. This includes money pumped in to fund the JV's losses between 2013 and 2017

■

■

written premium (GWP) in the current financial year. The company’s GWP stood at `1,717 crore in

FY18.

A few months back, Star Health and Allied Insurance promoter and investors had sold their 89 per cent stake, for close to

`6,500 crore, to SafeCorp Holdings, a consortium of WestBridge AIF, Rakesh Jhunjhunwala and Madison Capital. Star Health had clocked a GWP of `4,161 crore in FY18.

"Star has a portion of its GWP coming from government insurance schemes. Focused on the more profitable retail health segment, Apollo Munich is a stronger brand and the customers it targets are in the higher end of the economic spectrum. So the company should fetch a better valuation," said an investment banker.

The Reddys want to bring down their debt of `1,750 crore, raised partially to fund their flagship company Apollo Hospitals Enterprise (AHEL). Of this debt, around `900 crore was used as equity capital in AHEL and close to `250 crore was pumped into Apollo Munich.

The shares of Apollo Hospitals had recently tanked when the Reddys increased the quantum of pledged shares. According to sources, the promoters are talking to a few general insurance companies for the stake sale. Among them, HDFC Ergo had evinced an interest in Apollo Munich even earlier. AHEL’s stake of 10 per cent in the insurance joint venture will remain with the joint venture.