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KKR Bets On Indian Life Insurance With 10% Stake In Max Financial

The private equity firm bought a 10 per cent stake in Max Financial Services for about $140 million, looking to benefit from 'robust growth' in India's life insurance market

Photo Credit : Reuters


KKR & Co LP bought a 10 per cent stake in India's Max Financial Services for about $140 million, the latest foreign investor to bet on the country's booming life insurance market.

The investment was made from KKR's Asian Fund II, the company said in a statement that did not disclose the value of the deal. The stake, purchased from a group of investors including Max Group founder Analjit Singh, would be valued at nearly $140 million, given the company's market capitalisation of $1.35 billion.

KKR joins Singapore's Temasek Holdings, Canada's Sun Life Financial Inc and Japan's Nippon Life Insurance Co to invest in India since the government last year changed regulations last year to allow higher foreign ownership in the $50-billion life insurance sector.

At 3.7 per cent, life insurance penetration in India pales in comparison to the combined 12 per cent for China and Hong Kong.

KKR said it sees "robust growth" in India's life insurance market, given the low penetration, rise in savings in the country and as the 1.3 billion population ages.

Max Group split several of its businesses last month into three separately listed entities - Max Financial Services, Max India - which have businesses in healthcare and health insurance, and Max Ventures and Industries Ltd, which makes specialty film for the packaging industry.

Max Financial Services owns a 72 per cent stake in India's fourth-largest private life insurer Max Life.