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PremjiInvest-Prudential bids for Star Health; ArcelorMittal-Nippon eye Essar Steel

06 March, 2018

PremjiInvest, the family investment arm of Wipro Ltd chairman Azim Premji, has joined hands with US-based financial services company Prudential Financial Inc. to bid for a controlling stake in Star Health and Allied Insurance Co. Ltd, a financial daily reported.

Last November, Star Health had shortlisted 8-10 bids from financial as well as strategic investors to sell its business.

The Economic Times report said that the valuation of the health insurance company could go beyond the initial estimate of Rs 6,000 crore ($923 million). Rahul Garg, partner at PremjiInvest, confirmed the tie-up with Prudential to ET.

Prudential Financial has presence in India through a joint-venture, DHFL Pramerica Life Insurance Co.

Private equity firms Bain Capital Warburg Pincus, a consortium of WestBridge Capital and Kedaara Capital, besides insurance companies ICICI Lombard and HDFC Ergo are also in the race to acquire the company.

Star Health was promoted by shareholders of the ETA Ascon Group, a large Middle East-based business conglomerate with interests in engineering, shipping, real estate and financial services. Its investors include ICICI Venture, Tata Capital Growth Fund, Sequoia Capital, Oman Insurance Company and Apis Partners.

The private equity firms had given the mandate to Kotak Mahindra Capital to find a buyer for their stakes in Star Health, the ET report said.

Star Health started its operations in 2006. It offers health insurance, mediclaim policies and personal accident cover. The company’s gross direct written premium was Rs 2,488.17 crore for the nine months ended December 2017.

In its resolution plan for acquiring debt-laden Essar Steel, ArcelorMittal India Pvt. Ltd has said that it is likely to bring in Japan’s Nippon Steel and Sumitomo Metal Corporation as joint-venture partners.

According to the press note by Arcelor Mittal, the JV will acquire and manage Essar Steel if the resolution plan gets the nod of the National Company Law Tribunal.

Essar Steel is currently undergoing a corporate insolvency resolution process initiated by the NCLT. It had received resolution plans from Russia’s VTB Capital-led consortium Numetal Mauritius and ArcelorMittal.

Essar Steel is among the 12 large non-performing asset accounts identified by the Reserve Bank of India in its first list for loan resolution under the insolvency and bankruptcy code.

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PremjiInvest-Prudential bids for Star Health; ArcelorMittal-Nippon eye Essar Steel

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