Abu Dhabi Investment Authority (ADIA) is investing Rs 655 crore for a 9.99 per cent stake in Aditya Birla Health Insurance Co. Ltd (ABHI). The investment values the health insurance arm of the Aditya Birla group at Rs 6,650 crore.

ABHI is a 51:49 joint venture between Aditya Birla Capital Ltd and Momentum Metropolitan Strategic Investments (Pty) Ltd, a wholly-owned subsidiary of South Africa-based Momentum Metropolitan Holdings Ltd (MMH).

In a regulatory filing, the listed parent of ABHL — Aditya Birla Capital Ltd (ABCL) — said that its board and that of ABHI approved the proposal for a primary capital infusion from a wholly owned subsidiary of ADIA. The completion of the transaction is subject to the receipt of statutory and regulatory approvals, including from the Insurance Regulatory and Development Authority of India (IRDAI).

ADIA will own 9.99 per cent stake in ABHI, ABCL 45.91 per cent, while MMH will own 44.10 per cent stake. ABHI plans to use this capital to drive its growth in the health insurance market in India. During the first quarter of this fiscal ended June 30, 2022, the gross written premium of the standalone health insurance (SAHI) business stood at Rs 630 crore, a rise of 71 per cent over the same period of the previous year, with retail and rural contributing 59 per cent to the total business.

ABHI’s market share also expanded 299 basis points over the previous year period to 12 per cent, among the SAHI players in the first quarter. Its business now covers over 2.2 crore lives. “In recent times health has become a key concern for all. With its differentiated HealthFirst model, ABHI is well positioned to address this concern, while also protecting health through insurance.

“An investment from ADIA underscores the strong and unique business model of ABHI and the franchise we have created,’’ Vishakha Mulye, chief executive officer of ABCL, said while commenting on the transaction. Shares of ABCL on Friday finished with gains of almost 2 per cent at Rs 110.80 on the BSE. ABHI grew 71 per cent in the first quarter against industry growth of 21 per cent. The regional franchise grew 37 per cent on yearly basis.