Abu Dhabi Investment Authority (ADIA) will be investing Rs 655 crore for a 10 per cent stake in conglomerate Aditya Birla Group's health insurance arm.
The boards of directors of Aditya Birla Health Insurance (ABHI) and its listed parent Aditya Birla Capital (ABCL) have approved a proposal for primary capital infusion of approximately Rs 665 crore from ADIA, valuing the company at Rs 6,650 crore, as per an official statement.
ABHI is a joint venture between the Aditya Birla Group and South Africa's Momentum Metropolitan Holdings (MMH). After the stake sale, which requires the clearances from insurance regulator Irdai, ABCL will hold 45.91 per cent stake in the company and MMH will have 44.10 per cent, it said.
"We see significant potential in India's health insurance sector as penetration levels increase, driven by higher awareness and broader economic growth," Hamad Shahwan Al Dhaheri, executive director of the private equities department at ADIA, said.
He added that ABHI's strong management team, a wellness-first product offering and a differentiated distribution model were a draw for the fund.
"An investment from ADIA underscores the strong and unique business model of ABHI and the franchise we have created," ABCL's newly appointed chief executive Vishakha Mulye said.
ABHI's chief executive Mayank Bathwal said the investment will help it expand 'health-first' proposition.
Earlier, the Aditya Birla Group had invested an undisclosed sum in a digital bank called 'Zand' in the UAE.
ABCL's scrip was trading 2.07 per cent up at Rs 111 apiece on the BSE at 1411 hrs on Friday, as against gains of 0.24 per cent on the benchmark.