Patanjali Ayurved Ltd and DS Group have teamed up to enter India’s insurance sector with the acquisition of Magma General Insurance Ltd from Adar Poonawalla-owned Sanoti Properties LLP and other shareholders.
Sanoti, Celica Developers and Jaguar Advisory Services will sell their majority stake in Magma General at a valuation of about Rs 4,500 crore ($517 million), subject to regulatory approvals, according to a press statement.
Patanjali Ayurved, established in 2006 and led by yoga guru Baba Ramdev and Acharya Balkrishna, makes herbal products, medicines and other FMCG products. The Dharampal Satyapal Group (DS Group), established in 1929, has presence across multiple sectors, including food and beverages, confectionery, mouth fresheners, hospitality, dairy, luxury retail, and agriculture.
The insurance company, previously known as Magma HDI General Insurance, offers more than 70 products across various categories. These include retail insurance products like motor, health, and home insurance. It also offers commercial products such as fire, engineering, liability, and marine insurance. The company has a market share of 1.05% in the non-life insurance segment.
The company expects to record gross written premium of Rs 3,650-3,700 crore in FY25, up from Rs 3,295 crore in FY24.
A spokesperson for Patanjali Ayurved said the insurance sector is undergoing regulatory reforms with the government allowing 100% foreign direct investment. The spokesperson also said that general insurance In India is “significantly underpenetrated” compared with developed countries and that Magma could benefit from Patanjali’s ability to infuse growth capital and its distribution strength including access to rural markets.
Magma General Insurance started in 2009 as a joint venture among Indian companies Magma Fincorp Ltd, Celica Developers, Jaguar Advisory and Germany's HDI Global SE. The Poonawalla group became the controlling shareholder of the insurance company after it acquired Magma Fincorp in February 2021. The group later increased its stake. HDI Global sold its entire stake to the Poonawalla group in November 2023 and exited the company.
Ambit Pvt. Ltd acted as the exclusive financial advisor. Khaitan & Co and Wadia Gandhy & Co acted as legal advisors to selling shareholders.