Religare Enterprises shares rose sharply Monday morning after the company decided to divest its entires take in its insurance arm Religare Health Insurance Company Limited, to a True North - led consortium.
Religare Enterprises Limited announced on Sunday that it has entered in to definitive agreements with a consortium of investors led by True North Managers, an India based private equity Fund (earlier known as India Value Fund Advisors), to divest its entire stake in Religare Health Insurance Company Limited.
True North clinched the deal, moving past Warburg Pincus, which was also a contender for Religare's insurance arm.PE firm Faering Capital and Gaurav Dalmia, executive vice chairman, MD & CEO of Landmark Holdings (Dalmia Group) are part of the consortium led by True North.
The deal pegs Religare Health Insurance Company's value at Rs 1300 crore. RHI had reported gross written premium of more than Rs 500 crore for the year ended March 2016. Currently, Religare holds 80% stake in the insurance arm, which was launched in 2012.
A partner of True North, Vikram Nirula said the PE firm is very much impressed by the quality of RIH's management and business and expects the insurance firm will be an excellent platform for building an enduring health insurance franchise in India.
Religare Enterprises group's CEO Maninder Singh said the sale is a continuation of Religare's strategy to consolidate and focus on its core businesses.
Religare offers a range of financial services, including loans to SMEs, affordable housing finance, health insurance and wealth management, through its subsidiaries and operating entities.
Religare Enterprises shares tumbled more than 5% to end at Rs 218.35 on Friday. This morning, the stock rose to Rs 230 in early trades, and is currently at Rs 221, up 0.75% from its previous closing price.
