SUMMARY
Notably, Aviva initiated a process to exit its Asia operations last year, valuing it at $2 Bn
The company is said to be in talks to acquire three other private life insurance companies
Navi’s acquisitions have been operations-centric to fulfill key regulatory requirements for banking
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Sachin Bansal-led financial service company Navi Technologies is reportedly looking to acquire Aviva Life Insurance Company, a joint venture between UK-based insurer Aviva and Indian consumer goods company’s investment arm Dabur Invest Corp.
Bansal is said to be in advanced talks with Aviva to take over the loss-making joint venture. Meanwhile, it is looking to buy out Dabur family’s investment in the venture for around INR 1,000 Cr to INR 1,200 Cr.
The Aviva Life Insurance Company was originally at 26:74 alliance, but Aviva Plc acquired an additional 23% stake from Dabur Invest Corp for INR 940 Cr in May 2016. Now Aviva Plc owns 49% stake in the joint venture valued at INR 4,087 Cr.
Notably, Aviva initiated a process to exit its Asia operations last year, valuing it at $2 Bn as part of an organisational haul. The insurer also roped in JP Morgan to facilitate the sell off of the Indian franchise, but there has been no update in this regard since then.
People aware of the matter told ET, the discussions with Bansal got picked up earlier this year and had been gaining momentum in the last couple of months.
An Inc42+ report, “Decoding Navi And Sachin Bansal’s $100 Bn Ambition” published in September, talked about Bansal’s strategies behind acquisitions, both with Flipkart earlier and now with Navi. The author found that while acquisitions at Flipkart were to plainly fast track the growth of the business, meanwhile Navi’s acquisitions have been operations-centric to fulfill key regulatory requirements for banking.
The story pointed out that while the $1.86 Tn market size for the BFSI (Banking, financial services and insurance) sector in India was massive and way more than the $64 Bn market size for the ecommerce sector. It also presented several challenges in the way of more competitors eager for a piece of the pie. However, the industry remains heavily guarded by capital and regulatory requirements as far as entry is concerned and the recent downfall of several public sectors and private banks have worried investors as well as consumers.
Following the Flipkart strategy, Navi Technologies has acquired a streak of companies such as Essel Mutual Fund, Essel AMC, Chaitanya Rural Intermediation Development Services (CRIDS) along with its wholly-owned subsidiary Chaitanya India Fin Credit Pvt Ltd, DHFL Insurance and Mavenhive. It also acquired Mumbai-based DHFL General Insurance for INR 100 Cr ($14 Mn) in January 2020.
It is looking to add more companies to its bucket list. The company is said to be in talks to acquire private life insurance companies Liberty General Insurance Ltd, Future General Life Insurance and DHFL Pramarica Life Insurance to expand its loan offerings.
In the FY2020, Navi Technologies reported a total consolidated income of INR 221.89 Cr with an expense of INR 219.96 Cr, leading to a profit before tax of INR 2.9 Cr. Yet the company ended with a loss of INR 8 Cr in the fiscal after tax.
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