ICICI Venture to invest Rs 120 cr, pick up 15-20% in Star Health

In the first PE deal in the Indian health Insurance sector, ICICI (ICICIBANK.NS : 952.65 +0.15) Venture on Thursday said the company is planning to pick up 15 -20% by investing Rs 120 crore ($ 27 million) in Star Health & Allied Insurance Company Ltd. The investment will take place over a period of one year.

For ICICI Venture, this would be the maiden investment from its new $500-million PE fund India Advantage Fund Series 3.

Commenting on the investment, Vishakha Mulye, managing director & CEO of ICICI Venture, said, "The Indian health insurance market is poised for an exciting future given the low penetration levels witnessed historically despite a clear underlying consumer need.''

ICICI Venture will also be interested in similar investment in other insurance companies.

Star Health is promoted by shareholders of the ETA Ascon group (a large West Asia-based business conglomerate with interests in engineering, shipping, real estate and financial services) and Oman Insurance Company (subsidiary of the UAE based Mashreq Bank with total assets of $ 25 Billion as on December 2009). The company is led by V Jagannathan, former chairman & MD of United India Insurance,

Chennai-headquartered Star Health has grown rapidly since its inception in 2006 to employ about 3,000 people and has a significant footprint in various parts of the country. The company has garnered gross premiums of about $200 million in the current fiscal, thereby making it the single largest private health insurer in the estimated $ 1.5-billion Indian market.