Indian tycoons to exit Munich Re JV

February 15 2019 by InsuranceAsia News Staff

Prathap Chandra Reddy and his family, founders of India’s Apollo Hospitals Enterprise, are looking to sell their holdings in Apollo Munich Health Insurance to repay debt.

The family is seeking to sell its entire holding of 41% in Apollo Munich Health Insurance for around Rs12 billion rupees (US$170 million) within the next six months, according to sources in India.

The proceeds will be used to repay part of the debt raised by pledging Apollo Hospital’s equity as collateral. Investors have been concerned about leveraged companies in India.

Shares of Apollo, India’s biggest hospital chain operator, which has about Rs34.3 billion of debt, plunged the most in seven years this week after the founders pledged more shares to raise funds to repay debt.

Munich Re, which owns a 49% stake, is also planning to sell its stake in the venture and is in talks with HDFC, India’s largest mortgage broker.

Gurgaon-headquartered Apollo Munich Health’s gross written premiums jumped by around 30% to Rs20.1 billion during 2018; the insurer sells health, travel and personal accident cover.

There has been a huge amount of deals and potential deals in the Indian insurance markets over the last 12 months as new regulations come into the play and the government looks to make it more competitive and less dominated by state-owned entities; we can expect a lot more activity over the next 12 months too.