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Aditya Birla Capital to sell its Insurance Broking Arm to Samara Capital for an EV of INR 455 crore

AltG's Principals, Poornima Vardhan and Taponeel Mukherjee, discussing rollup investment opportunities in India

By AltG Research On Behalf of Poornima Vardhan and Taponeel Mukherjee

Benchmark Deal: Samara Capital has valued Aditya Birla Insurance Brokers (ABIBL) at ~4.5X EBITDA. This deal sets a benchmark for follow-on deals in the sector. It also highlights the opportunity to create massive returns in the Indian Insurance Brokerage Industry.

How can Samara Capital generate returns?

  1. Roll-Ups are the path to creating massive returns in this sector to create significant value in the Indian Insurance Brokerage industry. Essentially, aggregate and roll-up smaller brokerages into a single platform, buying each asset at 3.5-4.5 X EBITDA. The Roll-Up platform will also benefit from cost-cutting by centralising backend operations for all the businesses acquired, better capital allocation, and efficient financing - Similar to the MSO model in the US.

  2. Liquid Secondary Market Helps - Platforms that can aggregate and grow Insurance Brokerage platforms will get access to a liquid secondary market from larger private equity funds and strategic buyers looking to tap into India's high-growth insurance brokerage market.

With India's growing working population and the large mortality protection gap, the trends favour the Indian Insurance Brokerage industry, offering massive potential and growth opportunities.


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