Vijay Shekhar Sharma-led Paytm plans to enter the general insurance space as the financial technology firm announced it is all set to acquire Mumbai based private sector general insurer Raheja QBE.
Vijay Shekhar Sharma-led Paytm plans to enter the general insurance space as the financial technology firm announced it is all set to acquire Mumbai based private sector general insurer Raheja QBE. Paytm, owned by One 97 Communications Limited along with Vijay Shekar Sharma, has agreed to buy the entire stake of Prism Johnson in the company, translating to 51% of the paid-up equity share capital of Raheja QBE, for 289.68 crore. Paytm will also acquire the remaining 49% stake, which is held by QBE Australia. The acquisition, totaling to Rs 568 crore, is through QorQl Pvt. Ltd, a technology company with Vijay Shekhar Sharma as the majority shareholder and the remaining stake held by Paytm.
“After enabling millions of Indians with services of homegrown Payments bank, it is now setting sights on democratizing general insurance services,” Paytm said in a media release on Monday. Paytm, with its large customer base and merchant ecosystem, said it would leverage this reach to innovate insurance products and services to accelerate its reach & adoption. Paytm said the move is in furtherance of Paytm’s mission of driving financial inclusion for over half a billion Indians.
Commenting on the deal, Amit Nayyar, President, Paytm said, “It is an important milestone in Paytm’s financial services journey, and we are very excited to welcome Raheja QBE General Insurance into the Paytm family. Its strong management team will help us accelerate our journey of taking insurance to the large population of India with the aim to create a tech-driven, multi-channel general insurance company with innovative and affordable insurance products.”
Raheja QBE with a revenue of Rs 189.46 crore in the last financial year contributed 3.18% to the consolidated revenue of Prism Johnson. The company’s net worth is at Rs 154.38 crore. Prism Johnson, however, said that the consideration for divestment of equity investment is subject to certain adjustments. These adjustments, Prism Johnson said, may be carried out between the date of execution of definitive agreement and closure of the sale, and other customary terms for a sale of such nature. The deal is estimated to be completed by the end of this year. Approval from the Insurance Regulatory and Development Authority of India (IRDAI) is yet to be taken.