Samara Cap Leads Race for the Aditya Birla Group Insurance
Updated On Dec 19, 2022
Recently, Samara Capital, an Indian private equity partner of Amazon Inc., has been in the news for leading the race to buy the insurance brokerage unit of Aditya Birla Capital Ltd. for Rs. 1000 crore. On December 19, 2022, individuals with direct knowledge of the development stated the above on the basis of anonymity.
Samara Capital and Aditya Birla Insurance Brokers Ltd. have been discussing the valuation over the past few weeks. The anonymous sources stated that the entry of Samara Capital into the insurance sector plays a key role in their strategy. Thus, the private equity group has made a bid for the insurance broker. If both parties reach an agreement after successful negotiations, the deal could be valued at Rs. 800-Rs. 1,000 crores.
According to the sources, the deal could be formalized and disclosed within the next few days, as the negotiations are at an advanced level. Once Samara Capital completes its due diligence, the deal may get completed in the next three to four months.
Aditya Birla Capital invited proposals for its subsidiary, Aditya Birla Insurance Brokers, about three months ago to streamline its financial services division and divest from companies with limited scope for expansion under their management. Aditya Birla Insurance Brokers is one of the leading sellers of life insurance and non-life insurance policies.
The global pandemic, COVID-19, has turned the wheels for the insurance sector. Therefore, considering the growth in the insurance market since the pandemic, it may be a golden opportunity for both Samara Capital to buy an insurance brokerage company and Aditya Birla Capital to get the best value for its insurance business line.