Grapevine: Hero Corp may buy into Max Financial; Tencent picks up Policybazaar stake

By Ankit Agarwal

  • 11 Nov 2019
Credit: Thinkstock

Sunil Kant Munjal’s Hero Corp is looking to buy a significant minority stake from Analjit Singh in Max Financial Services Ltd, two people in the know told The Economic Times.

Hero Corp may pick up to 15% stake, said one of the persons, adding that under the proposed deal Hero may declare itself a co-promoter and make an open offer. Singh could retain a 10% stake, said the people cited earlier.

Separately, Chinese social media and gaming giant Tencent Holdings Ltd has acquired a 10% stake in Policybazaar.com for $150 million (Rs 1,070.6 crore at current exchange rate) valuing the online insurance aggregator at $1.5 billion (Rs 10,706 crore at current exchange rate), a person familiar with the deal told The Economic Times.

The Shenzhen-headquartered company has scaled up its presence in the Indian fintech sector with this bet after entering the segment recently by investing in digital banking services startup NiYo Solutions earlier this year. Tencent, known for its WeChat messenger app, has backed technology companies including ride-hailing service Ola, education platform Byju’s and food delivery platform Swiggy.

Policybazaar is operated by ETech Aces Marketing and Consulting and allows users to compare and buy life, health or automobile insurance policies on its website.

Meanwhile, State Bank of India (SBI) plans to raise about Rs 8,000 crore ($1.12 billion at current exchange rate) by selling close to a 14% stake in a proposed initial public offering (IPO) of SBI Card & Payments Services Ltd valuing the latter at Rs 57,000 crore, a person in the know told The Economic Times.

SBI Card is a joint venture between SBI, which owns 74%, and US private equity firm Carlyle Group, which owns the remaining 26%. “Both SBI and Carlyle will sell stakes in the IPO,” the person added.

Back in 2017, Carlyle joined the business as a financial investor at a valuation of Rs 8,000 crore with Rs 2,995 crore for a 26% stake.

SBI has tapped banks to run the IPO process, bank officials have previously said. At the end of March 2019, SBI Card had total assets worth Rs 19,593 crore. India’s credit card market is still small compared to its debit card market. The latest regulatory data shows that there were 49.6 million credit cards in circulation in the country, compared with 836 million debit cards.

SBI Card is the second-largest credit card issuer in the country, with 8.8 million outstanding cards as of June 30. It only trails private lender HDFC Bank in terms of the number of cards issued.

SBI’s management has been looking at selling its investment in non-core assets to raise capital. SBI Card will be SBI’s second subsidiary to be listed. In 2017, the bank’s SBI Life Insurance was listed in an IPO. It was the biggest IPO after Coal India's.

In another development, SAIC Motor Corp. Ltd and Great Wall Motors Co. Ltd, two of China’s biggest automakers, are in talks with General Motors Co. to acquire its last remaining factory in India, two people in the know told Mint.

Located at Talegaon in Maharashtra, the plant has a capacity to produce 165,000 vehicles a year and 160,000 power trains.

MG Motor India, a unit of SAIC, has already entered the Indian markets with its debut of Hector sport utility vehicle (SUV) in June.

Great Wall, China’s biggest SUV maker, is actively scouting for land and existing factories in India to start operations.

GM stopped selling vehicles in India in early 2017, using the Talegaon plant to export its Chevrolet Beat hatchback primarily to Latin America. It could not completely shut its India operations as it failed to find a buyer for the second plant.