Sequoia Capital India is likely to invest Rs 160 crore in the leading health insurance firm Star Health and Allied Insurance Company, reports Business Standard.
Star Health, which had earlier raised $27 million from ICICI Venture, is likely to route the investment through Star Health Investments Pvt Ltd, the holding company which holds a majority stake in Star Health in order to comply with FDI norms. According to rules, FDI in insurance firms are allowed upto only 26%.
The insurance company is promoted by shareholders of the Middle East based ETA Ascon group (with interests in engineering, shipping, real estate and financial services) and Oman Insurance Company (subsidiary of the UAE based Mashreq Bank with total assets of $25 billion).
The company is led by V Jagannathan, former Chairman and MD of United India Insurance. The report quotes Jagannathan as saying: “The deal is expected to conclude in the next 10 days”.
The report says Star Health promoters will form an SPV to route the investments. The SPV has already got the Foreign Investment Promotion Board approval for induction of foreign equity to the tune of Rs 160 crore, the report adds. The SPV was holding 70 per cent in Star, which came down to 61 per cent after ICICI Venture took 14 per cent stake in March 2010.
The Chennai headquartered Star Health has garnered gross premiums of about $ 200 million in last fiscal. It has since its inception in 2006 has grown to about 3000 employees now with significant footprint in various parts of the country.
