Paytm’s insurance arm raises ₹920 crore from Swiss Re ahead of its ₹18,300 crore IPO
PaytmInsuretech has already received ₹397 crore of the total commitment.
- The company had initially planned to raise ₹16,600 crore, but the IPO size has now reportedly been revised.
- Ant Group is expected to execute neealy 50% of the secondary share sale in Paytm’s IPO.
AdvertisementPaytm Insuretech Private Limited — the insurance business of initial public offering (IPO)-bound One 97 Communications — has raised ₹920 crore ($122.5 million) from Swiss Reinsurance Company, in exchange for a 23% stake in the company.
Paytm Insuretech has already received ₹397 crore ($52.9 million) of the total commitment.
“It is an important milestone in our financial services journey of taking general insurance products to the masses. We look forward to gaining from Swiss Re’s global insurance capabilities and building innovative products to tap into the Indian market,” Vijay Shekhar Sharma, chairperson, managing director and chief executive officer (CEO) of One 97 Communications said.
The deal is subject to regulatory approval.
Paytm — valued at $16 billion — was founded in 2010 and is one of the largest digital payments companies in India.
The company is expected to hit the public market soon in the company month to raise ₹18,300 crore ($2.4 billion) from the public issue. The company had initially planned to raise ₹16,600 crore but the IPO size has now reportedly been revised.
This is India’s biggest IPO so far, surpassing Coal India’s, which raised ₹15,000 crore in October 2010.
Paytm intends to raise about ₹8,300 crore through fresh issues, while the rest would come as an offer for sale (OFS) from the existing stakeholders in the company. Ant Group — the largest shareholder in Paytm — is expected to execute nearly 50% of the secondary share sale in Paytm’s IPO, as per an Economic Times report.
Paytm works in several verticles — digital payments, commerce, lending and insurance.
The company received a brokerage licence in March 2020 to enter the insurance sector. Prior to that, the company had incorporated two insurance businesses — Paytm Life Insurance Corporation Ltd and Paytm General Insurance Corporation Ltd.
AdvertisementPaytm Insuretech had acquired 100% stake in Mumbai-based private sector general insurer Raheja QBE for ₹568 crore. The acquisition still hasn’t received regulatory approval.
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