Paytm and its founder Vijay Shekhar Sharma have decided to acquire Raheja QBE, a Mumbai-based private sector general insurance company, after buying 100 per cent stake from Prism Johnson and QBE Australia. The regulatory filing by Prism Johnson says Raheja QBE will be sold to QORQL Private Limited, which is technology company with Vijay Shekhar Sharma as the majority shareholder and remaining held by Paytm owner One97 Communications. The deal values the company at Rs 568 crore.
Paytm has said the deal, which marks its entry into general insruance space, will help it "democratise general insurance services" in India.
"The Board of Directors of the Company at its meeting held today, has approved divestment of its entire holding of 51% of the paid-up equity share capital in Raheja QBE General Insurance Company Limited ('RQBE'), a material subsidiary, to QORQL Private Limited, a technology company with majority shareholding of Vijay Shekhar Sharma and remaining held by Paytm (owned by One97 Communications Limited), for an aggregate consideration of Rs. 289.68 crore," Prism Johnson stated.
The date of completion of the sale depends on the time taken for receiving all approvals, including approvals from concerned regulators. It is estimated that the sale will be completed by 31 March 2021.
"It is an important milestone in Paytm's financial services journey, and we are very excited to welcome Raheja QBE General Insurance into the Paytm family," Paytm president Amit Nayyar said, Business Standard reported.
As per the company statement, Raheja's annual revenue for the financial year ending March 31 stood at Rs 189.46 crore, while its networth was Rs 154.38 crore. Raheja QBE has over 41,000 customers, and reportedly sold 69,000 new policies in FY20.
Vijay Aggarwal, Managing Director Prism Johnson Ltd, also said that the deal was in line with Raheja's mission to create sustainable shareholder value, which would further help it in focussing on core businesses. He said the deal with Paytm would help Raheja scale up to new heights by leveraging Paytm's large customer base and innovative products.