Bajaj Finserv to acquire Allianz stake for insurance control

Bajaj Finserv has announced a plan to buy out Allianz SE's stake in its insurance businesses for ₹24,180 crore. This deal is structured to meet the rules set by the Insurance Regulatory and Development Authority of India (IRDAI). Bajaj Finserv will acquire a small 1.01% stake directly, while the rest will be purchased by its promoter entities. Under the agreement, Bajaj Holdings & Investment will purchase 19.95% of the stake, and Jamnalal Sons will acquire 5.04%. This approach ensures compliance with regulations limiting stake purchases using borrowed funds. The overall deal values Bajaj Allianz General Insurance at ₹53,000 crore and Bajaj Allianz Life at ₹40,000 crore. The management stated that the acquisition would be self-funded and is expected to close within 15 months. This move will give Bajaj full control over its insurance operations, which may allow for growth into new business areas. After the transaction, Bajaj Finserv is considering a potential rebranding and future plans for an initial public offering (IPO). IRDAI has requested that larger insurers like Bajaj propose a timeline for going public. However, Bajaj plans to revisit the idea of listing after 2-3 years. The payment for the small stake can be managed through internal resources, while larger payments will be handled by Bajaj Holdings from liquidating its assets. In the backdrop of this partnership, Allianz is exploring new ties with Jio, especially as it prepares to transfer its remaining stake. With IRDAI and Competition Commission of India approvals pending, Bajaj does not foresee major challenges in completing the deal given its existing market status.