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Financial technology platform Paytm, owned by One 97 Communications, and its CEO Vijay Shekhar Sharma are set to acquire Raheja QBE General Insurance.
Rehaja QBE, a Mumbai-based general insurer, which started operations in 2009, is a joint venture with 51 per cent stake with Prism Johnson and 49 per cent ownership with QBE Australia.
“Paytm is set to acquire both stakes and would own 100 per cent of the company,” Paytm said in a statement on Monday, adding that the strategic acquisition is through QorQl Pvt Ltd, a technology company in which Vijay Shekhar Sharma is a mjority shareholder, the remaining stake held by Paytm.
It did not disclose the transaction amount. The deal will be subject to regulatory approvals.
In a regulatory filing, Prism Johnson said it will be selling its stake for ₹289.68 crore and the sale is expected to be completed by March 31, 2021.
“The board of directors of the company, at its meeting held today, has approved divestment of its entire holding of 51 per cent of the paid-up equity share capital in Raheja QBE General Insurance Company Limited (‘RQBE’), a material subsidiary, to QORQL Private Limited, a technology company with majority shareholding of Vijay Shekhar Sharma and remaining held by Paytm (owned by One97 Communications Limited), for an aggregate consideration of ₹289.68 crore,” it said.
The acquisition would enable Paytm, which already has a host of financial services, including a payments bank, to work in the general insurance sector and will “democratise general insurance for driving financial inclusion”.
“Paytm has a large consumer base for its digital payments and financial services offerings. It has also built an extensive merchant ecosystem empowering them with end-to-end business solutions. The insurance company would leverage this network to build innovative insurance products to accelerate its reach and adoption,” the company noted.
Amit Nayyar, President, Paytm termed the acquisition as an important milestone in the company’s financial services journey. “We are very excited to welcome Raheja QBE General Insurance into the Paytm family. 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 with innovative and affordable insurance products.”
All employees of Raheja QBE would continue working at Mumbai and other locations.
Vijay Aggarwal, Managing Director, Prism Johnson, said, “Our decision to sell our stake in Raheja QBE is in line with our mission to create sustainable shareholder value and will enable us to focus our resources on our core businesses. This move will help the insurance business scale up to new heights by leveraging the large customer base and innovative products offered by Paytm.”
The divestment will result in the termination of the company’s joint-venture with Australia’s QBE in the general insurance business in India, Prism Johnson said, adding that post the divestment, RQBE will also cease to be a subsidiary of the company.
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