Bajaj Group completes acquisition of 23% stake in insurance businesses from Allianz — What you need to know

Mumbai: In the largest transaction in India’s insurance sector, Germany insurer Allianz SE has sold 23% stake each in its life and general insurance joint ventures to its partner, the Bajaj Group, for ₹21,390 crore, with a residual 3% set to be transferred in the coming months.

Pune-based Bajaj Group companies—Bajaj Finserv, Bajaj Holdings & Investment Ltd and Jamnalal Sons Pvt. Ltd—have paid ₹12,190 crore and ₹9,200 crore, respectively, for Allianz’s stake in Bajaj General Insurance and Bajaj Life Insurance, according to a media statement by Bajaj Finserv.

The share acquisition has no impact on the operations of the insurance companies or the interests of policyholders and business partners, Sanjiv Bajaj, chairman and managing director of Bajaj Finserv, said in the statement.

“The acquisition provides us strategic flexibility to access new markets, introduce new products, build scale and advance growth as insurance penetration in India is set to grow exponentially over the next two decades,” he said.

The deal is being completely funded fully by the Bajaj Group with no leverage, S. Sreenivasan, president—insurance and special projects, Bajaj Finserv, who led the transaction, said in the statement.

The ownership of the Bajaj Group in both insurance companies has now increased from 74% to 97%, with Bajaj Finserv alone having 75.01% stake.

Munich-headquartered Allianz’s remaining 3% stake in both insurers is expected to be transferred over the next few months through a proposed buyback of shares by the insurance companies, at the same price, pre-determined as part of the deal arrangements.

Following the remaining 3% share buyback, Bajaj Finserv’s shareholding in the insurers will rise to around 77.3%, whereas 18.1% will be held by Bajaj Holdings & Investment and the remaining by Jamnalal Sons.

In a separate release, Allianz said it expects to complete the sale of the remaining 3% stake by June 2026.

While the partnership with the Bajaj Group — initiated in 2001 — has been a success, Allianz said its ability to operate in the Indian market remained limited due to its minority position in the joint ventures, adding that the decision to divest is the result of “constructive and amicable talks with Bajaj.”

The group is unlikely to look at any incremental investments in the insurance business, strategic or otherwise, for at least the next couple of years, a senior industry source told Mint.

“They have just completed the transaction and with the regulatory and policy changes being seen in the insurance sector, Bajaj Group is expected to stabilise and grow the businesses before looking at fresh investments,” they said.

Shares of Bajaj Finserv ended 1.3% lower today at ₹2,005 on the NSE on Thursday, with the benchmark Nifty 50 sliding 1.01% to 25,876.85. The deal was announced after market hours.

Deal contours

The Bajaj Group had announced its agreement to expand ownership in both insurance companies from 74% to 100% through a share purchase agreement on 17 March 2025.

The Pune-based financial services group had then estimated a total consideration of ₹24,180 crore for acquiring the 26% stake in both the insurance companies.

As per the deal contours, Bajaj Finserv was to acquire around 1.01% stake in the insurers, Bajaj Holdings and Investment 19.95% and Jamnalal Sons about 5.04%.

The agreed consideration for 26% stake in Bajaj Allianz General was ₹13,780 crore, valuing the company at ₹53,000 crore. For Bajaj Allianz Life Insurance, the consideration was ₹10,400 crore, valuing the insurer at ₹40,000 crore.

Bajaj Group had then said that the JVs will be terminated upon completion of the first tranche of acquisition of at least 6.1% in the both insurers and reclassification of Allianz as an ‘investor’ instead of ‘promoter.’

With approvals from the Competition Commission of India (CCI) and the Insurance Regulatory and Development Authority of India (Irdai) received in four months, the insurance companies were re-branded as Bajaj General Insurance and Bajaj Life Insurance in October.

Allianz’s India plans

AllianZ SE’s exit comes less than a month after the government allowed 100% FDI (foreign direct investment) in the insurance sector.

Allianz said India remains an important growth market for the Group, which has a “strong ambition” to continue serving the expanding insurance sector in the future.

On 18 July 2025, Allianz had announced a binding agreement between wholly owned subsidiary Allianz Europe BV and Jio Financial Services Ltd to form a 50:50 joint venture for a domestic reinsurance insurance company. The two entities have also entered into non-binding agreements for setting up equally owned joint ventures for both general and life insurance businesses in India.

“Allianz will consider options for the redeployment of the proceeds that align with the company’s strategic priorities. This will include investments into our new joint ventures in India,” it said, adding that it expects to recognize a non-operating IFRS (IFRS (International Financial Reporting Standards) gain of approximately 1.1 billion euros from this transaction in its Q1 2026 results and anticipates a positive impact of approximately 5 percentage points on its Group Solvency II ratio.

Strong financials

With both insurance companies being comfortable on solvency, the return on equity (RoE) for the insurers is expected to improve by 1-2%, an industry expert said.

As per a presentation to investors dated 5 December 2025, Bajaj General Insurance had a net worth of over ₹13,000 crore and an industry best solvency of 325%.

For H1 FY26, the insurer posted an RoE of over 25%. Gross written premium for the six-month period was ₹11,615 crore, up 9% on year and assets under management stood at ₹34,974 crore as at the end of September.

Bajaj Life Insurance too had the highest solvency among life insurers at 359%, as per the investor deck.

The insurer had a net worth of ₹10,928 crore as of September and assets under management of ₹1.3 trillion as per the financials for Q2 FY26. Gross written premium for the first half of the current financial year was ₹13,844 crore, 20% higher on year.