WestBridge Capital begins process to exit Star Health stake

Source: Life Insurance International Author: Shubhendu Vimal Reading Time: 2 min

WestBridge Capital has initiated a process to exit its investment in Star Health and Allied Insurance, according to a report by Moneycontrol citing unnamed sources.

The private equity firm has asked investment banks to submit proposals for a mandate to oversee the sale of its stake. JPMorgan has been identified as the preferred adviser.

Based on the June quarter shareholding pattern, WestBridge holds approximately 40% of Star Health through Safecrop Investments India — a consortium established by WestBridge, the late investor Rakesh Jhunjhunwala, and Madison Capital.

WestBridge requested expressions of interest from investment bankers several weeks ago to manage the sale process for its Star Health shares.

Deal Structure and Timing

According to sources, the size, structure, and timing of any potential deal have yet to be determined and will depend on market conditions and investor interest.

"Given that the quantum of share held is huge, the idea is to explore multiple options for an exit," the source said.

"It is too early to say what would be the preferred route given that a large volume of shares is involved, but a combination of many options such as finding a strategic buyer, a set of financial investors and some bit of secondary market sale is likely," the person added.

Possible Reason for Exit

Moneycontrol reported that one possible reason for the planned exit is WestBridge's involvement with Kiwi General Insurance, a general insurance company it launched with industry veterans Neelesh Garg and Saurav Jaiswal in November 2024.

Kiwi General Insurance recently received approval from the Insurance Regulatory and Development Authority of India (IRDAI) to begin operations.

WestBridge is currently recognized as a promoter in both Star Health Insurance and Kiwi General Insurance. According to the report, IRDAI licensing norms allow a promoter to hold only one insurance licence, which could require WestBridge to exit Star Health after Kiwi General Insurance commenced operations.

Company Response

In response to Moneycontrol, Star Health Insurance stated:

"We do not comment on market speculation. Any decision relating to a shareholder's investment is entirely a matter for the shareholder. The company continues to remain focused on executing its business strategy and creating long-term value for all stakeholders."

Background

The report also referenced Prudential relinquishing its promoter status in ICICI Prudential after acquiring a 75% stake in Bharti Life Insurance.

According to its website, Star Health was established in 2006 and offers health, personal accident, overseas, and local travel insurance.

WestBridge first invested in Star Health in 2018, when it and consortium partners Madison Capital and the late Rakesh Jhunjhunwala acquired a significant majority stake — possibly more than 90%.

When Star Health was listed in December 2021, Safecrop Investments reduced its holding from approximately 48–49% to 41%. Promoters have continued lowering their stakes since then.

This article was originally created and published by Life Insurance International, a GlobalData owned brand.