Ace Investor Rakesh Jhunjhunwala is looking to reduce his capital commitment in Star Health Insurance, which is being acquired by Safecrop Holdings, a source close to the matter told CNBC-TV18.
Safecrop Holdings is a consortium of WestBridge AIF, Rakesh Jhunjhunwala and Madison Capital. It had, in August this year, signed a definitive agreement with the shareholders of Star Health to purchase their shares in the company for Rs 6,500 crore.
Jhunjhunwala and Associates together hold close to 39 percent stake in the consortium and the capital committed by Jhunjhunwala is likely to be in the range of Rs 2,275-2,500 crore.
Jhunjhunwala's decision to reduce his capital commitment comes following some discrepancy in the second and third quarter results of Star Health Insurance, the above mentioned source said.
Another source familiar with the development said that the proposed move by Jhunjhunwala to reduce the capital commitment may put the transaction in jeopardy as the consortium would want to renegotiate the deal valuation.
Set up in 2006, Chennai-based Star Health is the country’s first and largest standalone health venture.
Star Health Insurance's premium grew 40 percent while net profit surged 44 percent in FY18.
Rakesh Jhunjhunwala declined to comment on the story while WestBridge Capital is yet to respond to CNBC-TV18's requests seeking comment. V Jagannathan, CMD of Star Health Insurance, denied any deal talks with regards to valuation.
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