Zurich has agreed to pay ₹4,051 crore for 51% stake including fresh growth capital of up to ₹1,609 crore. The expected date of completion for the sale is June 30, 2024, for acquisition of 51% stake by Zurich and acquisition of an additional stake of 19% within a period of three years.
The takeover will need several regulatory approvals, including those from the Reserve Bank of India (RBI), the Insurance Regulatory and Development Authority of India (IRDAI) and the Competition Commission of India (CCI), Kotak Mahindra said in a stock exchange announcement.
Once Zurich, based in Switzerland and a 100% subsidiary of Zurich Insurance Group, acquires the 51% shareholding in Kotak General Insurance, the business will cease to be a subsidiary of Kotak Mahindra Bank.
Kotak General Insurance, which started operations eight years ago, has reported a loss of ₹117 crore in FY23. It has net worth of ₹341 crore as of March 31, 2023. The solvency ratio of the company as on March 31, 2023 is 1.83. The total Assets under Management of the Company was ₹1,744 crore. The insurer grew its premium from ₹742 crore in FY 2021-22 to ₹1,134 crore in FY 2022-23 registering a growth of 52.7%.
Shares of Kotak Mahindra Bank rose 0.77% to ₹1,737 on the BSE compared to a 0.77% rise in the benchmark Sensex.
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