Baba Ramdev-owned Patanjali Ayurved, the Indian consumer goods giant, has entered the general insurance sector by acquiring a majority stake in Magma General Insurance. The move marks a significant expansion for the company, known for its range of Ayurvedic and wellness products, into the highly competitive insurance market.
As part of the transaction, Patanjali Ayurved will assume the role of the promoter entity for Magma General Insurance, a significant restructuring that could reshape the dynamics of the Indian insurance landscape. The deal is expected to further diversify Patanjali’s business portfolio, which has traditionally focused on wellness, personal care, and food products.
Elaborating on its foray into the insurance sector, a spokesperson for Patanjali Ayurved said, “The sector is undergoing exciting regulatory reforms with 100% FDI opening up. Structurally, general insurance in India is significantly underpenetrated vis-à-vis developed countries and IRDAI’s vision for insurance for all by 2047 could go a long way in plugging the gap. Magma General Insurance could benefit immensely from our ability to infuse growth capital, huge distribution strength, including access to rural markets as Patanjali Ayurved products are available at 2,00,000 counters, national level chains including Reliance Retail, Hyper City, Star Bazaar, and 250 Patanjali Mega Stores.”
Transaction partners
The sellers in the transaction include a group of entities, with the most notable being Senoti Properties, a joint venture between prominent businessman Adar Poonawalla and Rising Sun Holdings. Senoti Properties held a 74.5% stake in Magma General Insurance before the deal.
Adar Poonawalla, the founder of Senoti Properties, shared his optimism for the transaction: “We are proud that over the last few years, Magma General Insurance has built up its business carefully, both on the retail and corporate side, with over 18,000 agents, more than 2,000 corporates, 14 OEMs including all the large OEMs, and more than 80 players in the financial services business. It has delivered a growth rate of 26% over the last 5 years. We are confident that it will continue to make a strong contribution to the general insurance industry, under the new ownership of Patanjali Ayurved and the DS Group.”
Other sellers include Celica Developers, Jaguar Advisory Services, Keki Mistry, Atul DP Family Trust, Shahi Sterling Exports, and QRG Investments & Holdings.
On the buyer side, in addition to Patanjali Ayurved, several foundations, including SR Foundation, RITI Foundation, RR Foundation, Suruchi Foundation, and Swati Foundation, have acquired stakes in Magma General Insurance.
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The transaction is expected to bring new opportunities to Magma General Insurance, which has been looking to strengthen its market position in India. The presence of Patanjali, a well-established brand with a loyal consumer base, could provide substantial synergies for the insurer as it seeks to expand its reach and market share in the general insurance segment. Its foray into the sector could also create further competition for existing players.
