India-based Axis Bank is planning to buy a 10% stake in Go Digit Life in a transaction valued at $9m, reported Reuters citing sources.
Go Digit Life is startup Digit’s yet-to-be- launched venture in the field of life insurance.
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The entity awaits certificate of registration by Insurance Regulatory and Development Authority of India (IRDAI) to offer life insurance products in the country.
The startup currently functions in the general insurance sector and offers products in travel, motor, property and health insurance segments.
According to the sources, the proposed deal may value the new business at $90m.
Meanwhile, Go Digit General Insurance, backed by Canadian billionaire Prem Watsa and Sequoia Capital, is reportedly valued at $4bn.
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By GlobalDataA source said the deal with Digit is expected “to help Axis improve outreach to insurance customers with its own banking offerings”.
As per data from India’s insurance regulator, life insurance penetration, assessed by the country’s life insurance premium as a percentage of its gross domestic product – increased to 3.2% in fiscal year 2021, up from 2.15% two decades ago.
At present, Axis in collaboration with Max Financial offers insurance products.
Last week, private lender HDFC Bank agreed to buy a stake of 9.944% in Go Digit Life Insurance, for a consideration ranging between Rs500m ($6.2m) and Rs700m ($8.76m).
Under the deal, HDFC will make the payment in two tranches by subscribing to equity shares of Go Digit Life Insurance. Recently, Go Digit General Insurance filed papers to raise over $440m through an initial public offering. The firm expects a valuation of $5bn.
