Abu Dhabi’s ADIA to infuse $83m in India's Aditya Birla Health Insurance

The insurance arm of Aditya Birla Group, Aditya Birla Health Insurance (ABHI), said it is raising $83 million from a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA).

ABHI is a 51-49 joint venture between Aditya Birla Capital Limited (ABCL) and Momentum Metropolitan Strategic Investments, a wholly owned subsidiary of South African-based Momentum Metropolitan Holdings Limited (MMH).

Upon completion of the fundraising, which is subject to receipt of statutory and regulatory approvals, ADIA will own a 9.99% stake, ABCL 45.91% and MMH 44.10% in ABHI. The transaction values ABHI at about Rs 6,650 crore, the company said in a statement.

The insurance sector in India, crowded by the likes of Acko, LIC and PolicyBazar, has seen a sharp growth in recent times as the pandemic made more people realise the need for financial protection and insurance coverage.

“We see significant potential in India’s health insurance sector as penetration levels increase, driven by higher awareness and broader economic growth,” Hamad Shahwan Al Dhaheri, executive director of the private equities department at ADIA, said in a statement.

The insurance industry in India is estimated to be worth $280 billion, according to the India Brand Equity Foundation (IBEF). However, the penetration levels of insurance across the country remain below 5%.

The past year has seen a rise in funding for insurance startups in India, with participation from a host of global investors. Earlier this year, Loop had raised $25 million from General Catalyst and Elevation Capital (formerly Saif Partners) while ClaimBuddy raised $3 million from Chiratae Ventures and Rebright Partners.

This year also saw the biggest IPO in the history of the Indian markets — Life Insurance Corporation of India (LIC), which debuted at an IPO price of Rs 949 per share, valuing it at around Rs 5.7 trillion. The company’s stock is now trading at Rs. 682.4.

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