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Paytm Insurance brings Swiss Re to its Cap Table

Paytm’s founder & CEO Vijay Shekhar Sharma

Digital payment major Paytm announced on Wednesday that its sister firm, Paytm Insurance ltd, has entered a strategic partnership with Swiss Re. Based in Switzerland’s capital Zurich, Swiss Re is a reinsurance company. In all likelihood, this is Swiss Re’s first ever investment in India. This is also the first big investment by external investor in Paytm Insurance.  

With this strategic partnership, Swiss Re will be investing INR 923 crores through equity shares and CCPS shares. The investment will give Zurich based company 23% stake in Paytm’s insurance unit.

As per the arrangement, Swiss Re will be paying INR 397 Crore upfront while it will make the remaining investment in the upcoming tranche.

Last year in July, Paytm Insurance had acquired 100% stake in the Mumbai based insurance company Raheja QBA.

Paytm’s foray into the insurance space represents its long cherished ambition to become full-stack wealth management company. Today the company is present in literally every important vertical of financial services. Be it insurance, stock-borking, wealth advisory and digital payment. The digital payment is obviously its core business where it is present in both side of the spectrum, B2B as well as B2C.   

India’s insurance market, by the way, is indeed a lucrative market. Compared to other developing and developed countries, insurance penetration in India is still very low. A large quantum of India’s population still remains uninsured. New age insurance companies like Paytm Insurance and Acko insurance are capitalizing on conducive factors like rapid penetration of internet and smartphones to supplement their growth.

Off late,  Paytm has been in news for its much anticipated IPO. Planning to raise whopping 16,600 crore from India’s capital market, the Paytm IPO will be India’s largest ever IPO. Barely two days back, India’s regulatory body SEBI had given green signal to Paytm’s 16,600 crore IPO.  

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