Digital payments firm Paytm and its founder Vijay Shekhar Sharma are acquiring Raheja QBE General Insurance Company Ltd from the Rajan Raheja Group and Australia’s QBE Insurance Group Ltd.
Raheja group company Prism Johnson Ltd said in a stock-exchange filing it will sell its stake in the insurer to QorQl Pvt. Ltd, a technology company majority owned by Sharma and Paytm, for Rs 289.68 crore ($38.8 million).
In a separate statement, Paytm said QorQl will also acquire the remaining stake in the insurer held by QBE.
As per VCCircle estimates, this would indicate a valuation of Rs 568 crore ($76.2 million) for Raheja QBE.
The insurer will leverage Paytm’s consumer and merchant ecosystem to build out insurance products, with a view to increase their reach and adoption.
“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,” Paytm president Amit Nayyar said.
Separately, QBE Australia Pacific CEO Vivek Bhatia said the move would help simplify the group’s business.
Raheja QBE was set up in 2007. In 2015, QBE Group raised its stake in Raheja QBE to 49% from 26% for Rs 102.9 crore ($15.8 million then).
The Mumbai-based company provides personal insurance, business insurance and family insurance services. In May last year, the company said it had appointed Liberty General Insurance’s Pankaj Arora as chief executive and managing director.
Paytm founder Vijay Shekhar Sharma’s move comes as the latest sign of newer financial technology and services companies making inroads into markets serviced by established players.
Paytm’s parent, One97 Communications Ltd, raised $1 billion at a valuation of $16 billion last year from investors including Chinese e-commerce giant Alibaba Group’s Alipay, SoftBank Vision Fund and T Rowe Price.
The company has steadily expanded its services from mobile wallets and recharges to a full gamut of financial services, including mutual fund and gold investments, and e-commerce.
Flipkart co-founder Sachin Bansal has also made several moves in this sector. In January, Bansal-controlled Navi Technologies acquired DHFL General Insurance Ltd from Wadhawan Global Capital. At the same time, International Finance Corporation said it would pick up a 4.5% stake in Navi for Rs 210 crore (around $30 million.
Then, in April, Navi Technologies raised Rs 3,226 crore in funding from Bansal, a mid-market private equity firm and high net-worth individuals including former HDFC Bank deputy managing director Paresh Sukthankar. In September last year, Bansal acquired Chaitanya Rural Intermediation Development Services Pvt. Ltd.