Max New York Life Insurance Company finds a new foreign promoter when New York Life exited the life insurance company by selling its 26% stake to Mitsui Sumitomo for around Rs. 2,730 crores.
A simple calculation – if 26% is equal to Rs. 2,730 crores, then the life insurance company is valued at Rs. 10,507 crores. This is a healthy valuation for the 10 year old life insurance venture. This is by far the second highest valuation received so far by a life insurance company in India, barring LIC. Almost a year back Reliance Life Insurance Company sold 26% stake t Nippon Life for Rs. 3,062 effectively valuing the company at Rs. 11,500 crores.
Coming back to New York Life – they had invested Rs. 505 crores in Max New York Life Insurance almost 10 years back and now walk away with close to Rs. 1,929 crores. Out of their total stake of 26%, New York Life had to sell 9.37% to Max India at par (Rs. 182 crores) to Max India as they had the right of first refusal. Max India sold off this stake to Mitsui Sumitomo for Rs. 984 crores. So Max India too made some handsome gains in this transaction.
The transaction would be subject to regulatory approvals in India. Mitsui Sumitomo is already a joint venture partner in the Cholamadalam MS General Insurance Company.