Navi Technologies Pvt. Ltd, Flipkart co-founder Mr. Sachin Bansal led company, is likely to buy out the Joint Venture arm of Kishore Biyani`s Future Group’s Life insurance.
Future Group holds a total of 57.62%, Industrial Investment Trust Ltd. holds 16.88%, and Generali holds 25.5% in the three-way Joint Venture Future Generali Life. According to the two people who are aware of the ongoing acquisition talks, it is in advanced discussion talks and the deal is valuing the insurance firm at rupees 1,400 to 1,500 crore.
The deal has reached a formal proposal stage and will be announced soon as both the parties are keenly interested in the transaction. The embedded value of Future Generali Life Insurance is rupees 800 crores and as per the industrial standards, a multiple of 1.5 to 2 times the embedded value is a decent valuation of the company.
The Biyani-promoted debt-laden Future group was planning to exit both its general and life insurance businesses by selling off the controlling stakes it has in both the Joint Ventures. The investment bank UBS is advising the Future group on the deal.
The key businesses including retail, wholesale, warehousing, and logistics of Future group was sold on Saturday to Reliance Industries Limited’s subsidiary Reliance Retail Venture Limited for 24,713 crore rupees on a slump rate basis. The manufacturing and distribution of Fast Moving Consumer Goods and integrated fashion sourcing and manufacturing business and its insurance Joint Ventures with Generali and Joint Ventures with NTC mills will be retained by Future Enterprises Limited, after the transaction.
The life insurers who largely depended on the agency channel rather than the bancassurance channel were badly hit after the lock down induced by the COVID-19 pandemic. Converting Navi into a full-fledged financial services group will be fulfilled by Mr. Sachin Bansal after the deal by adding multiple companies from the insurance, digital banking, and fintech sectors.
Navi acquired the mutual fund business of the Essel group last year and the General Insurance Business of DHFL this March quarter. Navi Technologies is the second entrepreneurial venture of Mr. Sachin Bansal, who marked the entry into the financial services sector by acquiring a Non-Banking Finance Company Chaitanya Rural Intermediation Development Services in September 2019.
