An agent selling insurance products to customers. Photographer: Brendon Thorne/Bloomberg.

Warburg Pincus To Acquire 26% Stake In IndiaFirst Life

Warburg Pincus has agreed to acquire a 26 percent stake in IndiaFirst Life Insurance Company Ltd. from Legal and General Group Plc for Rs 710 crore, paving the way for the British firm’s exit from the Indian insurer.

The acquisition by the U.S.-based private equity firm valued the insurer at Rs 2,730 crore, according to Legal and General Group’s filing to the London Stock Exchange.

Investment bank Ambit Private Ltd. advised the transaction, IndiaFirst Life said in a statement issued today. The sale is subject to approval from the Indian Insurance Regulatory and Development Authority of India.

This is the first deal that has fructified after the IRDAI issued regulations permitting the entry of private equity funds as promoters in unlisted insurance companies. A private equity firm owning over 10 percent share capital of an insurer is now considered a “promoter”.

“As we enter a new phase of growth, we welcome Warburg Pincus as a shareholder to support and drive focus towards value creation,” RM Vishakha, managing director and chief executive officer at IndiaFirst Life said in the statement.

Founded in 2010, Mumbai-based IndiaFirst Life has a presence in 1,000 cities and towns in India. As of March, it had Rs 12,622 crore of assets under management.

The other major shareholders in the insurer are the public-sector banks Bank of Baroda and Andhra Bank. They hold 44 percent and 30 percent, respectively. Legal & General will focus on its insurance business in the U.K. and the U.S. markets, it said in the statement.