CCI clears Magma HDI stake sale to MS, ICICI Venture and Poonawalla Group

The Competition Commission of India (CCI) cleared a stake sale in Magma HDI General Insurance Company Ltd to Morgan Stanley, ICICI Venture and the Poonawalla Group, according to a statement on Thursday.

Magma HDI had in March announced a deal worth Rs 525 crore, including a primary capital raise of Rs 250 crore, involving funds managed by ICICI Venture and Morgan Stanley.

Private Equity Asia along with Poonawalla Group firm Cyza Chem, and two family offices.

The deal also involved a secondary sale of Rs 275 crore that enabled Magma Fincorp and its group companies to comply with the Reserve Bank of India’s guidelines for ownership of stake in insurance companies.

According to a company statement, the fresh capital infusion of Rs 250 crore would provide growth capital to meet the needs of the expanding distribution capabilities of the general insurer.

The combination consisted of an effective combined interest of less than 25% of Magma HDI’s share capital on a fully diluted basis by India Advantage Fund S4 I and Dynamic India Fund S4 US I, acting through a special purpose vehicle, the CCI said.

NHPEA Trisul Holding BV, an investment holding company ultimately belonging to funds managed by Morgan Stanley, picked up an under 10% stake on a fully diluted basis in Magma HDI, the regulator said.

In February, the Pune-based vaccine major Poonawalla Group agreed to acquire a controlling 60% stake in Magma Fincorp by subscribing to a Rs 3,456 crore preferential issue.

Magma HDI was engaged in the non-life insurance business and offered products across categories like health, motor, personal accident, home and fire insurance.