The billionaire Burmans is set to cut off its stake and give up control of a life insurance joint venture with UK’s Aviva Plc as part of its strategy to raise capital for the primary consumer goods business.
Two anonymous sources with direct knowledge of the matter said that the deal will see the Burmans stake drop to 26 per cent from the current 51 per cent in Aviva Life Insurance Co.
The sources added Aviva Life will surge to 74 per cent after giving the foreign partner control of the life insurer venture.
One of the sources said, “Going by the current actuarial valuations, the 25% stake to be augmented by Aviva could be worth at least ₹1,500 crore."
The person said that the business is growing, and Aviva Life’s potential is huge, given the markets and customer segments in which Aviva Life has a better grip than other life insurers across the country.
The same person said, “If all goes well, the deal is likely to be announced within two months."
The chairman of Aviva Life Insurance Co. and vice-chairman of Dabur India, Mohit Burman by confirming the proposed transaction said that Aviva Plc has decided to increase stake from 49 per cent to 74 per cent when the regulations permit, and the Burmans will continue to be the JV partner.
The Burman family who among the top 20 richest in India has been looking to monetize its stake in Aviva Life Insurance for quite a few months and had also entered into stake-sale talks with Sachin Bansal, the co-founder of e-commerce firm Flipkart.
The source added that the talks did not materialize between the two because of differences over valuations and ownership terms.
Aviva Life which is fifth-largest life insurer across the world seems to be upbeat about India’s insurance business potential.
The Burmans owns Dabur which is also known for brands also includes, Real fruit juices and Hajmola digestive candy among other fast-moving consumer goods (FMCG). The family’s private holdings ranges from restaurant to healthcare to life insurance.