Safecrop to gain control of Star Health

Safecrop Holdings, a consortium of WestBridge Capital, Madison Capital and investor Rakesh Jhunjhunwala, is set to gain control of Star Health & Allied Insurance Co in what’s pegged as the sector’s largest M&A transaction in India. “The consortium of investors will acquire a controlling stake under the proposed deal for a total equity valuation of Rs 6,500 crore,” said V Jagannathan, chairman and managing director of the private health insurer.

The consortium will eventually acquire full shareholding from existing investors, said Jagannathan, who will stay on as Chairman and Managing Director. The transaction will include a timeline for this, said people with knowledge of the matter. Star Health had a health insurance market share of 10.6% at the end of March 2018. The existing investors include promoter Star Health Investments, ICICI Venture, Tata Capital and Oman Insurance Company among others. Jagannathan and some of his colleagues along with other individuals are also shareholders.

Kotak Mahindra Capital was financial adviser to Star Health and shareholders, sources said. WestBridge, Jhunjhunwala and Kotak didn’t respond to queries. The consortium had invested Rs 350 crore in the company in December 2018, Jagannathan said. “The previous investment is not the part of this valuation,” he added. The Insurance Regulatory and Development Authority of India has approved the deal, Jagannathan said, for which an agreement was entered into last year.


The company had Rs 5,400 crore of new business with profit of Rs 275 crore this year. New business registered growth of about 30% growth, compared with Rs 4,161crore in the previous year. Star Health has a pan-India distribution platform and an integrated ecosystem to tap the retail health insurance opportunity with 434 branches and offices. The company has a written a direct premium of Rs 4,161 crore, up 41%, with profit after tax of Rs 171 crore and a net worth of Rs 960 crore in FY18.