Currently, Prudential is a partner with ICICI Bank with around 22 per cent stake in the life insurance venture. With the announcement of a majority stake in Bharti Life Insurance, Prudential has to pare back its stake in the existing venture to comply with regulatory requirements.
ET had earlier reported that the Bharti Group is in talks to sell a majority stake of its life insurance business to Prudential Plc in a deal that could value the unit at around ₹7,000-8,000 crore. The proposed valuation showed a sharp jump from last year, when a 15% stake sale to 360 One implied a valuation of 3,000 crore, or about 1.1 times the embedded value (EV).
This is the second exit from a long-standing foreign insurance venture partner, following Allianz’s exit from Bajaj Finserve last year.
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Bharti Life’s strong local presence, combined with Prudential’s established insurance expertise, is expected to expand access to life and health protection solutions across the country, supported by the combined brand strength and operational capabilities of both organizations, the company said in a release.
However, the completion of the transaction remains subject to the receipt of regulatory approvals and the satisfaction of other conditions.
“We are delighted to welcome Prudential Plc as the controlling shareholder of Bharti Life, further accelerating its growth trajectory. Prudential’s experience and global scale, combined with Bharti’s strong track record, create a formidable alliance to tap into the immense potential of India’s life insurance sector,” said Sunil Bharti Mittal, Founder and Chairman, Bharti Enterprises, adding that this partnership opens new opportunities for Bharti Life’s employees and further reinforces the strategic relationship between India and the United Kingdom.
The investment is said to support Bharti Life’s next phase of growth by enhancing its product offerings and expanding its distribution reach to better serve evolving customer needs.
The transaction comes at a time when India’s life insurance sector is undergoing rapid transformation, driven by digital adoption, increasing awareness, and rising demand for financial protection solutions.
Karan Bhagat, MD & CEO of 360 ONE, which owns 15% stake in Bharti Life Insurance Company Limited, said, “Our private equity funds are pleased to have made a meaningful investment in Bharti Life Insurance and we have been encouraged by the company’s market-leading growth and strong momentum.”
“Today’s transaction reflects both its current performance and long-term potential. We are also delighted to welcome Prudential PLC’s controlling investment in Bharti Life Insurance and look forward to continuing the distribution of the company’s products through our network,” Bhagat added.
The insurance market continues to present strong structural growth opportunities, supported by favorable demographics and relatively low life insurance penetration, indicating significant unmet demand.
How will Prudential fund the deal?
Revealing the details of the transaction, Prudential said that it will be funded from existing resources. The transaction is expected to deliver compelling strategic and financial benefits for Prudential over time, it said, clarifying that further details will be provided when the companies receive regulatory consent for the transaction.
It is expected that part of the proceeds from any divestment of ICICI Prudential Life will be used to support future growth in the business.
The residual capital would contribute to Prudential’s free surplus, the UK-based firm said, adding that there is potential additional consideration payable of up to Rs 700 crore, dependent on the fulfilment of certain conditions.
Following completion of the deal, Prudential’s Indian operations will consist of majority-owned Bharti Life Insurance Company Limited and Prudential HCL Health Insurance Limited, and minority shareholdings in two listed entities, namely 35% of ICICI Prudential Asset Management Company Limited and 22% in ICICI Prudential Life Insurance Company.
Regulatory approvals for the transaction are expected to require Prudential to reduce its shareholding in ICICI Prudential Life to under 10 per cent, it noted. The insurance firm is engaging with the relevant regulatory authorities on this process and will seek an appropriate timeframe for the divestment that may be required, in the interests of its shareholders.
“India is a strategically important and exciting market for Prudential. By acquiring a controlling stake in Bharti Life, we are bringing together Prudential’s nearly 180 years of global insurance expertise and Bharti’s strong and growing local presence to serve the savings and protection needs of Indian consumers,” Prudential plc’s CEO Anil Wadhwani said.
Through this acquisition, he said, Prudential aim to contribute further to Viksit Bharat Initiative and, by extending access to the company’s products and services to customers in India, act as a catalyst for achieving ‘Insurance for All by 2047’.
“Our joint partnership with the ICICI group of companies has, for many decades, provided high-quality financial services solutions in India. We deeply appreciate this partnership and value our relationship with them,” he added.
As part of the transaction, Bharti Life will also look into securing strategic distribution agreements with Bharti Airtel and 360 ONE.