Andhra Bank plans to sell 30% in IndiaFirst Life Company

Mumbai: Andhra Bank plans to sell its 30 per cent stake in IndiaFirst Life Insurance Company in full or in part to raise Rs 900 crore, a person close to the matter said. Existing investor Warburg Pincus is one of the suitors for the stake.

Warburg Pincus had acquired a 26 per cent stake in IndiaFirst Life Insurance from UK-based Legal & General Group in June 2018 for Rs 710 crore, valuing the insurer at Rs 2,900 crore. It had bought the stake after the insurance regulator allowed private equity firms to become promoters of insurance companies.

“Investors, including Warburg Pincus, are lining up to buy the 30 per cent stake in IndiaFirst Life Insurance,” said the person.


Warburg Pincus said it would not like to comment. In December, Andhra Bank had said in a statement that it would sell its stake in the life insurance business.

Bank of Baroda owns 44 per cent of IndiaFirst, while Andhra Bank holds 30 per cent. Warburg Pincus can buy a 23 per cent stake on top of the 26 per cent it currently owns — the limit for foreign direct investment in insurance is now 49 per cent — which could make the American private equity firm the largest shareholder of the insurer.

Andhra Bank wishes to either fully or partially divest its stake to third parties in IndiaFirst Life in accordance with the provisions of the joint venture agreement, the bank had said in its request for proposal letter.

It issued the request for proposal for selection of an expert to carry out independent equity evaluation of the stake, on a per-share basis. In 2017-18, Andhra Bank had received Rs 32 crore as fee from bancassurance for selling life insurance products.

During the financial year, the bank had mobilised new business premiums including retail and group business of Rs 190.88 crore and renewal premium of Rs 214.31 crore. Andhra Bank also sells general insurance products of United India Insurance, Reliance General and Cigna TTK Health.