Patanjali Ayurved Acquires Majority Stake in Magma General Insurance

Patanjali Ayurved, owned by Baba Ramdev and Dharampal Satyapal Group (DS Group) has entered India’s general insurance sector by acquiring a majority stake in Magma General Insurance. This acquisition, valued at ₹4,500 crore, marks Patanjali’s first foray into the insurance business, expanding its operations beyond Ayurvedic products, wellness, and FMCG segments.

As of 12:13 pm on March 17, Patanjali Foods Ltd shares traded at ₹1,724, up 0.31% today, but declined 6.88% over the past 6 months and 21.82% in the past year.

Details of the Transaction

The primary seller in this deal is Senoti Properties, a joint venture owned by businessman Adar Poonawalla and Rising Sun Holdings. Senoti previously held a 74.5% stake in Magma General Insurance. Additional sellers include Celica Developers, Jaguar Advisory Services, Keki Mistry, Atul DP Family Trust, Shahi Sterling Exports, and QRG Investments & Holdings.

Ambit Pvt Ltd acted as the exclusive financial advisor, while Khaitan & Co and Wadia Gandhy & Co served as legal advisors to the sellers.

Rationale 

Following the acquisition, Patanjali Ayurved will become the promoter of Magma General Insurance. Patanjali aims to leverage its distribution network, which includes access to rural markets through 200,000 retail counters, national-level chains such as Reliance Retail, Hyper City, Star Bazaar, and 250 Patanjali Mega Stores.

The acquisition awaits regulatory approval before completion.

Magma General Insurance

Magma General Insurance operates across several sectors, including motor, health, property, and commercial insurance. For FY24, the company reported a Gross Written Premium (GWP) of ₹3,295 crore. It anticipates closing FY25 with a GWP between ₹3,650 crore and ₹3,700 crore. The company has maintained a 5-year average growth rate of 26%, supported by partnerships with over 2,000 corporate clients, 18,000 agents, 14 Original Equipment Manufacturers (OEMs), and more than 80 financial service businesses.

Conclusion

The insurance sector in India is undergoing regulatory changes, including the opening of 100% Foreign Direct Investment (FDI). Currently, the Indian general insurance sector remains underpenetrated compared to developed markets, as per the reports. Regulatory body IRDAI has outlined a goal of providing universal insurance coverage by 2047.

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