True North in advanced talks with investors for Rs 800 crore capital raise in Niva Bupa

Indian private equity firm True North has announced its plans to sell approximately 20% of its stake in Niva Bupa Insurance to its UK-based partner Bupa for around 27 billion rupees ($325 million).

True North, the prominent Indian private equity firm, announced on Friday that it will divest approximately 20% of its stake in Niva Bupa Insurance to its UK-based partner, Bupa, for a sum of approximately 27 billion rupees ($325 million). This strategic move will bolster Bupa's shareholding in Niva Bupa, solidifying its position as the majority shareholder in the business.

The decision comes amid growing interest in India's burgeoning insurance market and follows earlier reports suggesting that True North was contemplating a minority stake sale at a valuation of $2 billion. Niva Bupa, a joint venture between British United Provident Association (Bupa) and True North, has established itself as a key player in the health insurance sector, boasting partnerships with over 20 banks and a network of more than 10,000 hospitals.

True North is also in advanced talks with a consortium of financial investors to raise approximately Rs 800 crore in primary capital. This consortium includes Temasek, Motilal Oswal PE, Paragon Partners, and SBI Life. An official announcement regarding this proposed deal is expected in the coming weeks. If approved, True North's stake in Niva Bupa could be reduced to approximately 28%, with the consortium of financial investors holding around 7% of the company as leant by moneycontrol.

Read More: True North to sell controlling stake in Niva Bupa to JV partner Bupa

Following this transaction, Bupa's ownership in Niva Bupa is set to surge to approximately 63%, further cementing its commitment to the Indian market. While True North will retain its presence as a minority joint venture partner, the exact size of its stake post-sale remains undisclosed at this stage.

In an official statement, True North expressed confidence in Bupa's ability to lead Niva Bupa into its next phase of growth, hinting at the possibility of a future public listing for the business. This move underscores Bupa's strategic intent to expand its footprint in India's evolving healthcare landscape.

The exclusive financial advisor for this transaction is Kotak Investment Banking, representing both True North and Niva Bupa, while Rothschild & Co is advising Bupa.

True North assumed majority ownership of Niva Bupa in 2019, when it acquired a 51% stake from Max India. This acquisition was executed at an enterprise value of 10.01 billion rupees, positioning True North as a key player in the Indian health insurance sector.

The coming weeks are expected to bring further clarity on the specifics of the deal, as well as the potential implications for Niva Bupa's future growth trajectory in India's dynamic health insurance landscape.