March 28, 2015 Leave a comment
Recent reports from analysts show that current life insurance companies are to be valued at 1.2 to 2.1 times their embedded value FY2017, overwriting the previous agreements that valued them at three times the EV. Many are reporting that several sovereign wealth funds and global private equity firms are interested in Indian insurance companies, with those funds coming from Bahrain, Japan and, to name a few.
According to a top expert in the insurance field, “Financial investors are aware that the Indian life insurance is a growing market and therefore valuations will rise there is a continuous interest. Five sovereign wealth funds from Bahrain, Qatar, Japan are interested in Indian insurance companies. There are also large private equity funds such as Portchester Equity, Rockefeller private equity and General Atlantic who are interested.”
Portchester Equity and General Atlantic, run by such figureheads as their Managing Directors David Harbord for PE and Chris Lanning of General Atlantic respectively, both have expressed a large interest in India. Most recently, General Atlantic have routed close to $500 million, with a planned $2 billion in future investments across various Indian sectors.
Another consultant said, “I know that Temasek, GIC or Singapore and Canada Pension Board are interested in the Indian insurance sector. We came across several serious investors in our road show in Hong Kong.” Said Arundhati Bhattacharya, chairman of State Bank of India, “We have started talks with the joint venture (foreign) partners of both the insurance companies. They are keen to dial-up. There are other investors too who are also keen to buy a stake (in SBI Life Insurance.”
An expected deal to wrap up the end of March is with ICICI Bank, which owns 74 percent in ICICI Prudential Life Insurance and looks to sell 5 percent to Temasek Holdings and Carmignanc Gestion for $300 million.