PremiumThe Competition Commission of India (CCI) has cleared a stake sale in Magma HDI General Insurance Co. Ltd to Morgan Stanley, the Poonawalla Group and entities advised or managed by ICICI Venture.
Magma HDI General Insurance had in March announced a ₹525 crore deal in which fresh capital of ₹250 crore was to be issued to private equity funds advised or managed by ICICI Venture Pvt. Equity Fund and to Morgan Stanley Pvt. Equity Funds. The deal also involved a secondary sale of ₹275 crore worth of promoter stake to ICICI Venture, Morgan Stanley Pvt. Equity, Cyza Chem-a Poonawalla Group entity, and two family offices.
CCI said the transaction involved the acquisition of less than 25% of Magma HDI by two entities—India Advantage Fund S4 I and Dynamic India Fund S4 US I—on a fully diluted basis. The deal also involves the acquisition of less than 10% of the share capital of Magma HDI on a fully diluted basis by NTH, an investment holding company that ultimately belongs to a fund managed or controlled by an affiliate of Morgan Stanley.
SPV-I is a private limited company incorporated under the Indian Companies Act, 2013, in accordance with the Irdai (Investment by Private Equity Funds in Indian Insurance Companies) Guidelines, 2017 for the purpose of investing in the share capital of target.
Magma HDI is engaged in non-life insurance business and offers products across categories such as motor, health, personal accident, home and fire insurance.
“Investment by marquee private equity investors like ICICI Venture and Morgan Stanley along with leading family offices further underwrites the confidence in the company’s business and the quality of the management team. This development will support the strong growth trajectory of the company and will set its path to be amongst the leading players in the industry," Magma HDI had said in March. After the transaction, ICICI Venture and Morgan Stanley would appoint nominee directors to the Board, the company said then.
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