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Prudential, Indian billionaire link up in bid for insurer Star Health

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Prudential, Indian billionaire link up in bid for insurer Star Health

Prudential Plc has partnered with Indian billionaire Azim Premji to bid for a controlling stake in Star Health and Allied Insurance Co. Ltd., India's largest independent health insurer, The Economic Times reported March 7.

There are about a dozen bidders competing for Star Health's assets owing to the positive outlook for the Indian insurance sector following the government's announcement of a plan to implement a national health insurance scheme, the report said.

The health insurance market in the country is expected to quadruple to 500 billion rupees, the publication said, citing experts. This would push up Star Health's valuation above the initial estimate of 60 billion rupees when the sale process began, "people aware of the matter" said.

Rahul Garg, partner at PremjiInvest, confirmed the partnership with Prudential and noted that Star Health, which holds a 2.36% market share, could grow between 20% to 25% for the next four to five years.

Other bidders for Star Health include a WestBridge Capital Partners-led consortium, ICICI Lombard General Insurance Co. Ltd., Bain Capital LP, Warburg Pincus LLC and HDFC ERGO General Insurance Co. Ltd.

Carlyle Group LP, Temasek Holdings (Pte.) Ltd. and Hero FinCorp Ltd. were previously reported to count among the bidders.

Kotak Mahindra Capital has been appointed by private equity fund investors to manage the sale of their stakes in Star Health, the report added.

Star Health Managing Director V. Jagannathan, who holds a 3.5% stake in the company, said he was not aware of the bidders and declined to comment further, the report said.

As of March 7, US$1 was equivalent to 64.91 Indian rupees.