LIC in talks to acquire 50% stake in unlisted ManipalCigna Health Insurance

Life Insurance Corporation of India (LIC), the country’s largest insurer, is reportedly in advanced discussions to acquire up to 50% of the stake in ManipalCigna Health Insurance. This strategic move marks LIC's entry into the health insurance sector, aiming to diversify its portfolio and tap into the growing demand for health coverage.

ManipalCigna Health Insurance is a joint venture between the Manipal Education & Medical Group and US-based Cigna Corporation. The Manipal Group currently holds a 51% majority stake, with Cigna owning the remaining 49%. The potential deal could value ManipalCigna at around Rs 4,000 crore, with both the Manipal Group and Cigna expected to reduce their stakes proportionally if the transaction goes through.

According to sources, LIC and the two stakeholders have already signed a non-disclosure agreement and are progressing with the talks. The acquisition will help LIC tap into the expanding medical insurance market, which accounts for 37% of the Rs 3 trillion general insurance industry in India.

LIC’s Managing Director and CEO, Siddhartha Mohanty, confirmed during the company’s earnings call on November 8 that the insurer plans to acquire a stake in an existing standalone health insurer by the end of the current financial year. While the deal’s details remain under wraps, it is expected to cost LIC between Rs 1,750 crore and Rs 2,000 crore for the 50% stake.

The acquisition would follow the valuation of other standalone health insurers in the market. Niva Bupa Health Insurance, valued at Rs 13,740 crore, and Star Health & Allied Insurance, valued at Rs 26,843 crore, provide benchmarks for the sector, with ManipalCigna estimated to be valued between Rs 3,500 crore and Rs 4,000 crore.