Fairfax Financial Holdings has found buyers for a 12.2% stake in its joint venture insurance business in India, ICICI Lombard, according to reports over the weekend.
The Canadian insurer has agreed to sell to Red Bloom Investment Ltd, a Warburg Pincus private equity investment fund a 9% stake in the firm, while Tamarind Capital Pte Ltd and IIFL Special Opportunities Fund will get 1.59% each.
The sale values ICICI Lombard at 203 billion rupees or $3.15 billion.
After the deal, Fairfax’s share of the firm will be whittled down to 22.1%, while India's ICICI Bank Ltd will own 63.3% of the insurer.
Fairfax India Holdings, the company’s investment arm in the country, recently upped its investments to almost $1 billion with its additional capitalization of the Bangalore International Airport (BIAL).
According to finance research platform VCCEdge, the firm went on a fundraising mission in Canada in November 2014 to raise $500 million for its India ventures.
“The company will invest in businesses that are expected to benefit from India’s current pro-business political environment, its growing middle class and its demographic trends that are expected to underpin strong growth for several years. Sectors of the Indian economy that the company believes will benefit most from such trends include infrastructure, consumer services, retail sector and the export sector,” Fairfax India stated in its public offering regulatory filings.
Fairfax is reported to be optimistic about Indian opportunities largely due to a regulatory overhaul of the conduct of business in the country, which includes direct transfer of subsidies, labour laws, and the bankruptcy code; as well as a renewed focus on infrastructure and the development of smart cities.