Aditya Birla Capital completes sale of its stake in Aditya Birla Insurance Brokers to Edme Services

Aditya Birla Capital stated that with the completion of this transaction, ABIBL will no longer be a subsidiary of Aditya Birla Capital as of August 30, 2024, as Edme Services now holds 100% ownership of ABIBL.

Financial Services firm Aditya Birla Capital Limited (ABCL) concluded the sale of its 50.002 percent stake in Aditya Birla Insurance Brokers Limited (ABIBL) to Edme Services Private Limited, which is part of the Samara Capital Group and an affiliate of Samara Alternate Investment Fund, the firm informed stock exchanges on August 30.

ABCL stated that this move follows a series of notifications from it, including letters dated March 27, 2023; December 29, 2023; March 28, 2024; and June 28, 2024, which detailed the planned sale of 25,65,103 equity shares, representing a majority shareholding in ABIBL.

The transaction also involved the execution of a share purchase agreement (SPA) among ABCL, ABIBL, Infocyber India Private Limited (which is the other shareholder of ABIBL holding 49.998 percent and which was subsequently amalgamated into Birla Group Holdings Pvt. Ltd.), and Edme Services.

"....We refer to our earlier letters dated 27 March 2023, 29 December 2023, 28 March 2024, and 28 June 2024 intimating the proposed sale of entire 25,65,103 equity shares of Rs. 10/- each, held by the Company (along with its nominees), representing 50.002% of the issued and paid-up share capital of Aditya Birla Insurance Brokers Limited (‘ABIBL’) to Edme Services Private Limited (“Purchaser”) and the execution of a share purchase agreement (“SPA”) between the Company, ABIBL, Infocyber India Private Limited (which is the other shareholder of ABIBL holding 49.998% and which was subsequently amalgamated into Birla Group Holdings Pvt. Ltd.) and the Purchaser (“Proposed Transaction”)," Aditya Birla Capital said in the exchange filing.

Aditya Birla Capital said the transaction, which was approved by the Insurance Regulatory and Development Authority of India (IRDAI) on July 24, 2024, was finalized on August 30, 2024.

"In this regard, we now wish to inform you that the Proposed Transaction has been completed, and the Company has received the upfront consideration on closing, amounting to Rs. 252.16 crores from the Purchaser, in accordance with the terms of the SPA, towards the sale of the Company’s 50.002% shareholding in ABIBL. Pursuant thereto ABIBL ceases to be a subsidiary of the Company with effect from 30 August 2024 and the Purchaser has become 100% shareholder of ABIBL," Aditya Birla Capital added.

Vishakha Mulye, CEO, Aditya Birla Capital Limited said, “We keep evaluating opportunities for our businesses with the long-term objective of creating stakeholder value. In line with the same, we are happy to announce the completion of divestment of Aditya Birla Capital’s entire stake in Aditya Birla Insurance Brokers Limited to Edme Services Private Limited, which is part of Samara Capital, one of India’s leading private equity firms.”

As part of the agreement, ABCL said it has received an upfront payment of Rs 252.16 crore from Edme Services. It further stated that with the completion of this transaction, ABIBL will no longer be a subsidiary of Aditya Birla Capital as of August 30, 2024, as Edme Services now holds 100% ownership of ABIBL.

Manish Mehta, the co-CIO of Samara Capital, which is the lead investor in Edme, added, “We are thrilled to carry on further building on this wonderful platform created by the Aditya Birla Group and the great team at ABIBL. By investing behind our people and technology, we aspire to be insightful and valuable partners in the insurance ecosystem and serve to further increase the penetration of risk management solutions and products. We thank our valuable customers, underwriting partners and channel associates for their continued faith in us. We assure them that we will continue to serve their best interest with renewed vigour, better access through scale and technology and above all a humble yet steely resolve to make a difference.”

ABCL stock closed marginally lower at Rs 220.11 apiece, down 0.46 percent on August 30.