Paytm Insuretech raises Rs 920 crore from Swiss Re

By: |
October 28, 2021 2:45 AM

Paytm Insuretech plans to leverage Paytm’s customer base and merchant ecosystem to develop innovative insurance products and offer the best-in-class solutions.

Swiss Re will invest Rs 397.3 crore upfront, and the remaining will be in tranches subject to fulfilment of certain milestones. Swiss Re will also pick up an aggregate stake of 23% in Paytm Insuretech on a fully diluted basis, both firms said in a statement.Swiss Re will invest Rs 397.3 crore upfront, and the remaining will be in tranches subject to fulfilment of certain milestones. Swiss Re will also pick up an aggregate stake of 23% in Paytm Insuretech on a fully diluted basis, both firms said in a statement.

IPO-bound Paytm’s insuretech unit Paytm Insuretech on Wednesday raised Rs 920 crore from reinsurance giant Swiss Re in a strategic deal through a mix of equity shares and compulsorily convertible preference shares.

Swiss Re will invest Rs 397.3 crore upfront, and the remaining will be in tranches subject to fulfilment of certain milestones. Swiss Re will also pick up an aggregate stake of 23% in Paytm Insuretech on a fully diluted basis, both firms said in a statement.

India’s insurance market presents a significant opportunity, given the market’s protection gap and under-penetration, compared to the global average. Gross written premium for non-life insurance is expected to increase from $27 billion in FY21 to $50- 60 billion by FY 2026, as per RedSeer data.

Paytm Insuretech plans to leverage Paytm’s customer base and merchant ecosystem to develop innovative insurance products and offer the best-in-class solutions.

“We are excited to partner with Swiss Re for our insurance foray as a key strategic investor. It is an important milestone in our financial services journey of taking general insurance products to the masses. We look forward to gaining from Swiss Re’s global insurance capabilities and building innovative products to tap the Indian market,” said Vijay Shekhar Sharma, chairman and chief executive officer of One 97 Communications.

Swiss Re’s investment into Paytm follows the announcement of the acquisition of Raheja QBE by Paytm Insuretech in June. The investment by Swiss Re and the acquisition of Raheja QBE by Paytm Insuretech are subjects to regulatory approvals.

Paytm is currently headed towards a mega stock market debut which is considered the largest IPO in India till date. Recently, the fintech major decided to increase its IPO size to Rs 18,300 crore from Rs 16,600 crore. The company last week received Sebi’s approval for the listing.

The entire increase is to come from existing shareholders, including Alibaba’s Ant Financial and Softbank, selling more stakes. The fresh issue of equity shares worth Rs 8,300 crore remains the same, as in the original offer. The company had planned to raise a total of Rs 16,600 crore by issuing fresh equity worth Rs 8,300 crore and another Rs 8,300 crore through an offer-for-sale.

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