The Housing Development Finance Corporation (HDFC) Limited, country’s biggest lender, has now received permission from the IRDAI (Insurance Regulatory and Development Authority of India) to buy 51.2% stake in the Apollo Munich Health Insurance Company Limited – Joint Venture between India’s Apollo Hospitals, and Germany’s Munich Re Group.
In a regulatory filing, HDFC said “the Corporation and HDFC Ergo have received all requisite approvals for the acquisition including Competition Commission of India (CCI), Reserve Bank of India (RBI), and the last being from IRDAI on 1 January”. The bank added “post the completion of the proposed acquisition, Apollo Munich will be merged with and into HDFC Ergo, subject to approval from the Mumbai bench of National Company Law Tribunal”.
Last year in June, HDFC said it will claim 50.8% stake of the Apollo Hospitals Group in order to get into a joint venture with the German reinsurer Munich Re Group in order to exploit the potential growth in this market.
As per the initial deal, HDFC were to pay Rs. 1,336 crore to the Apollo Hospitals to buy out its 50.8% stake, now HDFC will also pay Rs. 10.84 crore to employees of Apollo Munich Health Insurance Company Limited in order to purchase an addition 0.4% stakes held by them. After this, HDFC will be likely to own 51.2% stake in Apollo Munich by paying a total of around Rs. 1,347 crore which is 1.2X higher than the gross written premium stated for the fiscal year 2019.
HDFC currently runs HDFC Ergo General Insurance Company Limited which is a joint venture between HDFC and Ergo International AG, a subsidiary of Munich Re Group. Munich also holds 49% stake the Apollo Munich Health Insurance Company Limited.
HDFC Gets Go-ahead To Buy Majority Stake In Apollo Munich Health Insurance As the news hit the market, share price of HDFC touched Rs. 2,444 (0.4% growth), and share price of Apollo Hospitals rose to Rs. 1,490.90 (increase of 4.5%) on the BSE (Bombay Stock Exchange).