Things we are reading today - May 29th, 2024

Adani Group is interested in acquiring a stake in One 97 Communications, the company behind Paytm, following a meeting with Paytm CEO Vijay Shekhar Sharma.

This move would mark Adani’s entry into the fintech market, competing with Google Pay, PhonePe, and Jio Financial. Sharma owns nearly 19% of Paytm, which has faced regulatory and financial challenges, including restrictions from the RBI and partnership withdrawals from lenders like Aditya Birla Finance.

The potential deal with Adani Group comes as a timely opportunity for Paytm amid its ongoing difficulties.

360 ONE Asset has launched a ₹4,000 crore private equity secondaries fund, with over half already raised. It has closed five investments, covering 20-25% of the portfolio. The fund focuses on secondary-led pre-IPOs, single and multi-asset secondary deals, and special situations, with average investments of ₹150-250 crore.

The global secondaries market is valued at over $130 billion, while it’s still emerging in India. 360 ONE Asset, managing $8.7 billion in assets, is part of the 360 ONE group with $56 billion under management.

The firm is also preparing a healthcare fund, an early-stage venture fund, and a fourth pre-IPO fund, with investments in companies like NSE, NSDL, ANAROCK, Pharmeasy, Swiggy, and FirstCry.

RBI has launched a mobile app for retail investors to transact in government securities (G-Secs), available on the Play Store and App Store. This follows the Retail Direct Scheme initiated in November 2021, allowing investors to buy and sell G-Secs in primary and secondary markets.

Additionally, RBI introduced ‘PRAVAAH’, a secure web portal for authorizations and regulatory approvals, with 60 application forms currently available.

RBI also launched the FinTech Repository and EmTech Repository, managed by the Reserve Bank Innovation Hub, to collect data on fintech activities and the adoption of emerging technologies by regulated entities. These repositories aim to provide useful data and trends for policymakers and industry participants.

LIC’s entry into the health insurance sector is expected to intensify competition and potentially trigger consolidation within the already crowded market.

The health insurance segment has seen rapid growth due to rising medical inflation and increased awareness, leading to a 25-50% increase in premiums over the past few years. LIC’s move could pressure other insurers to reduce premiums.

LIC plans to expand into health insurance through inorganic growth, potentially acquiring stakes in standalone health insurance companies. This expansion aligns with expectations of regulatory approval for a composite license for large insurers post-elections.

Currently, there are five standalone health insurance companies in India, with new players also entering the market. LIC’s entry could accelerate consolidation and increase competitive dynamics.

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