IRDAI board meets today; may give nod to Patanjali-Magma deal, KIWI licence

IRDAI

The Insurance Regulatory and Development Authority of India (IRDAI) will hold its board meeting on July 14 to consider approvals for acquisitions and several long-pending insurance licenses, according to sources.

Sources familiar with the matter told Moneycontrol that the board is likely to greenlight the Rs 4,500-crore acquisition of Magma General Insurance by Baba Ramdev’s Patanjali Ayurved, in partnership with the DS Group. The deal, announced in March and structured through a Share Purchase Agreement, involves acquiring a 98.055 percent stake in Magma from Sanoti Properties LLP (an entity linked to Adar Poonawalla), Celica Developers, and Jaguar Advisory. The transaction is pending final clearances from IRDAI and the Competition Commission of India. The CCI has already granted approval for the takeover via the green-channel route, suggesting that the transaction does not raise any significant competition concerns, as reported by several publications.

In the absence of a full-time IRDAI chairman since Debasish Panda’s term ended in March 2024, the upcoming board meeting will be held under the interim chairmanship of P K Arora, the senior-most member and actuary of the regulatory body.

In parallel, sources added, the IRDAI board is also expected to grant licenses to several new insurance players.

According to sources, at the front of the queue is KIWI General Insurance, a joint venture established by WestBridge Capital and Neelesh Garg, the former Managing Director and CEO of Tata AIG. With WestBridge Capital set to hold more than 60 percent in KIWI General Insurance, the venture marks the firm’s renewed foray into India’s insurance sector following its complete exit from Star Health and Allied Insurance in December 2021. WestBridge had previously been the largest shareholder in Star Health, holding a 40 percent stake, which it divested through a combination of IPO participation and secondary market sales.

Other approvals likely on the table include a general insurance joint venture between Qatar Insurance Group, Sam Ghosh’s Cosmea Financial Holdings, and a group of additional investors, supported by an initial investment of Rs 300 crore, sources said. Reports indicate that Qatar Insurance is expected to hold around 40 percent stake, while Cosmea will hold just under 50 percent, with the rest coming from other investors.

Also awaiting IRDAI approval is a proposed general insurance venture led by the M Pallonji Group, in partnership with private equity firm True North and a group of additional investors, sources said. While specific financial details have not been disclosed, the consortium has submitted an application a license and is aiming to enter India’s non-life insurance space with a focus on innovation and scale.

All of the groups mentioned above have applied for R1 licenses and are currently awaiting clearance through IRDAI’s multi-stage approval process, sources clarified.

IRDAI follows a structured, three-stage process for granting licenses to new insurance companies in India. The first stage, known as the R1 license, involves a preliminary review of the promoters’ background, business plans, and proposed capital structure. If R1 is approved, the applicant moves to the R2 stage, where the regulator conducts a more detailed assessment of the company’s operational preparedness, covering areas such as governance, IT infrastructure, product readiness, and compliance systems. The final stage, R3, is the formal registration that allows the entity to begin underwriting insurance business.

Each stage is sequential, and approval at one level does not guarantee clearance at the next, sources clarified.

According to sources, one of the reasons for the delay in clearing many of these proposals has been the prolonged wait for the appointment of a new IRDAI chairman. Debasish Panda’s three-year term as IRDAI Chairman ended in March 2024, leaving the post vacant pending a new appointment.

Emails sent to the IRDAI remained unanswered until the time of publication.

Moneycontrol had earlier reported that the list of potential candidates include Giridhar Aramane (former Defence Secretary) and Ajay Seth (former Finance Secretary).