EXTRA: Prudential's Bharti Life controlling stake buy "makes sense"
18 maj, 16:14
(Alliance News) - Prudential PLC is making a "good deal" in buying buying 75% of Bharti Life Insurance Co Ltd, in a sign of capital being "more effectively" allocated, a Panmure Liberum analyst commented on Monday.
Prudential, a London-based insurer focused on Asia, is acquiring the controlling stake from Bharti Life Ventures Pvt Ltd and 360 ONE Asset Management. It will owe an initial cash consideration of approximately USD389 million upon completion, to be funded from existing resources, plus a conditional payment of up to USD78 million.
"This amounts to a c1.5x trailing EV multiple (taking the initial cash payment) for a business that is growing top line (APE sales) well into double digits (>40%)," Panmure's Abid Hussain noted.
The deal does not alter Prudential's plan to return USD7 billion to shareholders between 2024 and 2027, it said. As of December 31, Prudential's holding company cash and short-term investments totalled USD4.3 billion, and its leverage ratio was 13%.
"India is a highly attractive market for Prudential, and this transaction is a strategic move to secure majority ownership of a life insurance business in the country," Prudential explained, noting the country's "positive demographic trends and structural growth opportunities".
"It has large, unmet demand for savings and protection with a low penetration of life insurance," the company added.
Once the new deal closes, Prudential's Indian business will comprise majority-owned Bharti Life Insurance and Prudential HCL Health Insurance Ltd, alongside stakes of 35% and 22% respectively in ICICI Prudential Asset Management Co Ltd and ICICI Prudential Life Insurance Co Ltd. To meet regulatory criteria, Prudential expects to reduce its stake in ICICI Prudential Life to below 10%. It is working with authorities on a divestment timeline "in the interests of its shareholders".
"The pivot to Bharti Life makes sense, given it will control the business," Hussain commented, adding that "the deal is more than funded by any required sell down [of the PRU ICICI Life stake]." He noted that the current 22% stake is worth around USD1.8 billion.
Prudential expects to use part of the divestment proceeds to fund future business growth, with residual capital boosting free surplus, which stood at a ratio of 211% at the end of December.
In conjunction with acquiring Bharti Life Insurance, Prudential expects to collaborate with the other businesses connected to Bharti Enterprises Ltd. It is eyeing "strategic distribution agreements with Bharti Airtel and 360 ONE."
Bharti Enterprises owns Bharti Airtel Ltd, which is itself the majority shareholder of FTSE 100-listed telecommunications operator Airtel Africa PLC. Back in 2006, Bharti Enterprises launched Bharti AXA Life Insurance Co Ltd, a joint offering with Paris-based AXA SA.
Separately, Prudential is working towards regulatory clearance for a standalone, majority-owned health insurance business in India, which is expected to become operational in 2026.
Chief Executive Anil Wadhwani commented: "By acquiring a controlling stake in Bharti Life, we are bringing together Prudential's nearly 180 years of global insurance expertise and Bharti's strong and growing local presence to serve the savings and protection needs of Indian consumers.
"Our joint partnership with the ICICI group of companies, has, for many decades, provided high-quality financial services solutions in India. We deeply appreciate this partnership and value our relationship with them."
Hussain commented: "We think [the Bharti Life acquisition] is a good deal in a country with a supportive demographic, rising middle classes, GDP growth prospects and fits the wider group's strategy.
"It is also good to see management continue to allocate capital more effectively across the group."
Panmure maintains a 'buy' rating for Prudential, with a target price of 1,610 pence per share.
Prudential shares were up 0.9% at 1,145.50p on Monday afternoon in London.
By Emma Curzon, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2026 Alliance News Ltd. All Rights Reserved.
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EXTRA: Prudential's Bharti Life controlling stake buy "makes sense"
18 maj, 16:14
(Alliance News) - Prudential PLC is making a "good deal" in buying buying 75% of Bharti Life Insurance Co Ltd, in a sign of capital being "more effectively" allocated, a Panmure Liberum analyst commented on Monday.
Prudential, a London-based insurer focused on Asia, is acquiring the controlling stake from Bharti Life Ventures Pvt Ltd and 360 ONE Asset Management. It will owe an initial cash consideration of approximately USD389 million upon completion, to be funded from existing resources, plus a conditional payment of up to USD78 million.
"This amounts to a c1.5x trailing EV multiple (taking the initial cash payment) for a business that is growing top line (APE sales) well into double digits (>40%)," Panmure's Abid Hussain noted.
The deal does not alter Prudential's plan to return USD7 billion to shareholders between 2024 and 2027, it said. As of December 31, Prudential's holding company cash and short-term investments totalled USD4.3 billion, and its leverage ratio was 13%.
"India is a highly attractive market for Prudential, and this transaction is a strategic move to secure majority ownership of a life insurance business in the country," Prudential explained, noting the country's "positive demographic trends and structural growth opportunities".
"It has large, unmet demand for savings and protection with a low penetration of life insurance," the company added.
Once the new deal closes, Prudential's Indian business will comprise majority-owned Bharti Life Insurance and Prudential HCL Health Insurance Ltd, alongside stakes of 35% and 22% respectively in ICICI Prudential Asset Management Co Ltd and ICICI Prudential Life Insurance Co Ltd. To meet regulatory criteria, Prudential expects to reduce its stake in ICICI Prudential Life to below 10%. It is working with authorities on a divestment timeline "in the interests of its shareholders".
"The pivot to Bharti Life makes sense, given it will control the business," Hussain commented, adding that "the deal is more than funded by any required sell down [of the PRU ICICI Life stake]." He noted that the current 22% stake is worth around USD1.8 billion.
Prudential expects to use part of the divestment proceeds to fund future business growth, with residual capital boosting free surplus, which stood at a ratio of 211% at the end of December.
In conjunction with acquiring Bharti Life Insurance, Prudential expects to collaborate with the other businesses connected to Bharti Enterprises Ltd. It is eyeing "strategic distribution agreements with Bharti Airtel and 360 ONE."
Bharti Enterprises owns Bharti Airtel Ltd, which is itself the majority shareholder of FTSE 100-listed telecommunications operator Airtel Africa PLC. Back in 2006, Bharti Enterprises launched Bharti AXA Life Insurance Co Ltd, a joint offering with Paris-based AXA SA.
Separately, Prudential is working towards regulatory clearance for a standalone, majority-owned health insurance business in India, which is expected to become operational in 2026.
Chief Executive Anil Wadhwani commented: "By acquiring a controlling stake in Bharti Life, we are bringing together Prudential's nearly 180 years of global insurance expertise and Bharti's strong and growing local presence to serve the savings and protection needs of Indian consumers.
"Our joint partnership with the ICICI group of companies, has, for many decades, provided high-quality financial services solutions in India. We deeply appreciate this partnership and value our relationship with them."
Hussain commented: "We think [the Bharti Life acquisition] is a good deal in a country with a supportive demographic, rising middle classes, GDP growth prospects and fits the wider group's strategy.
"It is also good to see management continue to allocate capital more effectively across the group."
Panmure maintains a 'buy' rating for Prudential, with a target price of 1,610 pence per share.
Prudential shares were up 0.9% at 1,145.50p on Monday afternoon in London.
By Emma Curzon, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2026 Alliance News Ltd. All Rights Reserved.
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