After acquiring Allianz’s 26% stake in Bajaj Allianz General Insurance and Bajaj Allianz Life Insurance for Rs 24,180 crore, Bajaj Finserv is planning to explore listing of its insurance ventures.
Sanjiv Bajaj, chairman and managing director of Bajaj Finserv, said there was a regulatory nudge for listing of larger insurance companies. The boards of the life and general insurance firms will decide on listing after obtaining regulatory approvals, completing the stake transfer and rebranding.
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According to Bajaj, this process is expected to take one-two years, and boards of both the companies are seriously evaluating the IPO option. He said Bajaj and Allianz aim to complete this deal as early as possible.
The Bajaj Group, which includes Bajaj Finserv, Bajaj Holding and Jamnalal & Sons, is financing the 26% acquisition, and has committed substantial resources to the insurance companies.
On Tuesday, the Bajaj Finserv stock fell by 1.33% to Rs 1,845 and Bajaj Holdings declined 0.17% to Rs 11,570 on the BSE.
In an interview with CNBCTV18, Bajaj emphasised that they would independently operate the insurance business as they are well-capitalised and possess a high solvency ratio, in addition to having developed capabilities to run the business on their own over the last 24 years. He noted that Indian promoters who have taken independent paths have succeeded in the insurance sector.
Bajaj said there would be no leadership changes in the life and general insurance businesses – they will continue to be managed by the empowered board and professional management team. During a virtual town hall for employees, he affirmed that there would be no impact on the company’s operations or business.
Internally, employees have been preparing for this transition, and there were no surprises for them.
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Following the buyout, Allianz will be released from the non-compete clause and free to pursue its ambitions in the Indian market. Allianz is reportedly planning to collaborate with Jio Financials in the financial services sector.
Bajaj said building scale in the insurance business in India is challenging, as most companies tend to remain small and unable to bring in sufficient capital,
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