Paytm has been gearing up for its foray into the insurance aggregation space for a few quarters, and got a broking license to sell third-party insurance products. Its founder Vijay Shekhar Sharma and the company are further strengthening Paytm’s financial services story by acquiring general insurer Raheja QBE General Insurance Company.
According to a Bombay Stock Exchange filing, QORQL Pvt Ltd will acquire 100% of the paid-up equity share capital in Raheja QBE for an aggregate consideration of Rs 568 crore. QORQL is owned by Sharma (51%) and Paytm (49%).
A press release issued by Paytm said that Sharma will be the majority shareholder. He invested Rs 289.68 crore while Paytm infused the remaining 278.32 crore
The transaction is expected to be completed by March 31, 2021, and subject to receiving approval from the regulator Insurance Regulatory and Development Authority of India or IRDAI.
The acquisition will ramp up Paytm’s larger story of financial services. The company had also held a conversation with SAIF-backed insurance aggregator Coverfox for acquisition, but it fizzled out. Later, Coverfox’s chief executive Premanshu Singh joined Paytm as senior vice president and insurance head.
It’s worth noting that there are only 34 companies authorized to sell general insurance products in India, including Raheja QBE. If the deal gets approved, Paytm can sell in-house as well as third parties’ general insurance products.
Having started its operations in 2009, Raheja QBE is a joint venture between Rajan Raheja Group and QBE Insurance, Australia’s second-largest global insurer. Raheja QBE had posted net losses of Rs 62.1 crore for the fiscal ending in March 2020, increasing threefolds from losses of Rs 20.35 crores in FY19. At the end of FY 2020, the insurer had generated net revenue of Rs 189.46 crore and a net worth of Rs 154.38 crore.