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ICICI Securities Report
Private market valuation continues to be significantly higher than public market multiples in the non-life insurance space. We enlist certain transactions in the non-life insurance space from the past five–six years (latest being increase in stake in Niva Bupa by Bupa). We notice:
Private transactions are at a premium to listed valuations. This could be driven by the control premium (acquirers may get Board representation) usually available in private deals.
Valuation multiples of these deals have increased over the last five-six years despite the slowdown in insurance premiums in FY21/22 (5.2%/11% growth) and possible risk of composite licenses, indicating investor comfort around long time growth potential.
There is also an increasing sign of majority stakes being taken/sought by foreign partners.
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