Global private equity firm KKR announced on Thursday that it has acquired a 9.95 per cent stake in Max Financial Services. Though the deal size was kept under wraps, industry estimates pegged it around $ 150 million.

Max Financial Services, the newly de-merged entity of the Max Group, holds around 72 per cent in Max Life. The fourth-largest life insurer in the private sector, Max Life is a joint venture with Japan-headquartered Mitsui Sumitomo Insurance.

KKR acquired the stake from a clutch of investors led by Analjit Singh, Chairman Emeritus of the Max Group.

With the Centre raising the FDI cap in the insurance sector to 49 per cent, a number of foreign investors have increased their exposure in their Indian joint ventures (JVs). Singapore’s Temasek Holdings, Canada’s Sun Life Financial Inc and Japan’s Nippon Life are among those that invested recently.

Portfolio route KKR made its investment in Max from its Asian Fund II through the portfolio route. The PE firm has been scaling up its investments in India.

In December, it picked up a majority stake in home-grown financial services firm Avendus Capital. Last year, it had invested $150 million in JBF Industries.

KKR said it sees “robust growth” happening in India’s life insurance market given the low penetration, rise in savings in the country, and the aging of the 1.3 billion population.

According to a recent report by Kotak Institutional Equities, after several months of weakness (single-digit growth or decline), Max Life reported 21 per cent growth in individual annual premiums in January, driven equally by volumes and ticket size.

The average policy size in individual business was up 9 per cent year-on-year in January.

A number of foreign players, including French insurance giant AXA, UK-based Standard Life and Japan’s Nippon, have announced the raising of their shareholding in their insurance joint ventures in India.

In November, ICICI Bank announced it would sell a 6 per cent stake in ICICI Prudential Life Insurance to Premji Invest and its affiliates, and Compassvale Investments Pte, a unit of the Singapore-based Temasek, for ₹1,950 crore.

Housing Development Finance Corporation also said that it would sell 0.95 per cent in HDFC Life to the Azim Premji Trust for ₹198.9 crore.

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