Digital payments and financial services firm Paytm on Wednesday said Switzerland-based reinsurance major Swiss Re will buy a 23 per cent stake in Paytm Insuretech for about Rs 920 crore.
Paytm's insurance unit, Paytm Insuretech (PIT), plans to leverage Paytm's customer base and merchant ecosystem to develop innovative insurance products.
Through an investment in PIT, Swiss Re and Paytm will work towards closing the insurance protection gap in the market.
"Swiss Re will invest (by way of equity shares and compulsorily convertible preference shares) approximately Rs 9,200 million (Rs 3,973 million upfront, and the remaining in tranches, subject to fulfilment of certain milestones) in PIT for an aggregate stake of 23 per cent on a fully diluted basis," Paytm said in a statement.
The investments in PIT follows the acquisition of Raheja QBE by Paytm Insuretech.
"We are excited to partner with Swiss Re for our insurance foray as a key strategic investor. It is an important milestone in our financial services journey of taking general insurance products to the masses.
"We look forward to gaining from Swiss Re's global insurance capabilities and building innovative products to tap into the Indian market," Paytm chairman, MD and CEO Vijay Shekhar Sharma said.
Sharma will also make an investment in PIT in his personal capacity along with Swiss Re. The company, however, did not disclose the investment details that Sharma will make in PIT.
The investment by Swiss Re and the acquisition of Raheja QBE by Paytm Insuretech are subject to regulatory approvals.
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