Adar Poonawalla, the conglomerate’s vice chairman, has decided to sell his 60% stake in Magma Insurance to Patanjali Ayurved, a company founded by Baba Ramdev, and the DS Group, a leading consumer products company. The deal is valued at around Rs 4,500 crore (approximately $615 million).
The announcement comes on the heels of Patanjali Ayurved’s foray into the insurance sector. The company’s entry into this space is expected to disrupt the traditional insurance market, leveraging its strong presence in the consumer goods and healthcare sectors. The acquisition will give Patanjali Ayurved control over Magma Insurance, which has been facing significant challenges in recent years.
The partnership is seen as a strategic move by both parties to expand their presence in the insurance sector. For Patanjali Ayurved, it presents an opportunity to diversify its revenue streams and tap into the lucrative insurance market. The company’s strong distribution network and brand equity will help Magma Insurance to increase its reach and customer base.
For Adar Poonawalla, the sale of Magma Insurance stake is seen as a smart move, allowing him to exit the loss-making business and focus on other interests. He has been struggling to revive the ailing insurance company, which has been plagued by poor performances and regulatory issues.
The deal is expected to be completed in the coming months, pending regulatory approvals. With this acquisition, Patanjali Ayurved is set to become a significant player in the Indian insurance space, which is expected to increase competition and innovation in the sector. The partnership between Patanjali Ayurved and Magma Insurance is expected to benefit both parties, creating value for their stakeholders and customers.