Key Points:
- Mahindra Manulife joint venture: A 50:50 partnership to launch a new life insurance business in India.
- Investment Plan: Both will invest up to ₹3,600 crore, with ₹1,250 crore each in the first five years.
- Growth Focus: Aims to combine Mahindra’s local strength and Manulife’s global expertise to tap India’s growing insurance market.
Mahindra & Mahindra Ltd. (M&M) on Thursday announced that its board of directors has approved entering into a Mahindra Manulife joint venture with Manulife Financial Corporation of Canada to establish a 50:50 life insurance business in India, subject to regulatory approval.
Under the agreement, M&M will hold 50% of the paid-up share capital in the proposed joint venture company, while the remaining 50% will be held by Manulife or its affiliates, in line with the joint venture terms.
“This new venture will strengthen Mahindra and Manulife’s existing footprint in India and underscores their commitment to enhancing the financial wellbeing of customers in one of the world’s fastest-growing markets,” M&M said in an official release.
New 50:50 partnership approved
The agreement represents the next phase in the collaboration between the two companies, which began with the launch of Mahindra Manulife Investment Management in 2020. The new Mahindra Manulife joint venture aims to expand the partners’ reach into India’s growing life insurance sector.
According to M&M, the total capital commitment from each shareholder is up to ₹3,600 crore ($400 million). Each shareholder is expected to invest ₹1,250 crore ($140 million) within the first five years.
Following the signing of the agreement, Mahindra and Manulife teams will jointly work on obtaining the necessary insurance license from Indian regulators for the Mahindra Manulife joint venture.
Focus on India’s insurance growth
Anish Shah, Group CEO and Managing Director of Mahindra Group, said the partnership aligns with Mahindra’s strategy to build a strong presence in India’s financial services sector.
“Manulife is the best natural partner for us given their global capabilities in insurance products, underwriting, and reinsurance. With a focus on leveraging technology, the Mahindra Manulife joint venture will build an efficient, customer-centric insurer in India. We are confident that this joint venture offers a compelling opportunity to create meaningful value for our shareholders,” Shah said.
The venture comes at a time when India’s life insurance market is expanding rapidly, driven by a young population, rising incomes, and increasing awareness of financial security. The partnership seeks to combine Mahindra’s local market expertise with Manulife’s international insurance experience to capture this growth.
Terms and capital commitment
As part of the agreement, both companies will nominate two directors each to the board of the joint venture company (JVCo). M&M will retain certain rights, including the ability to restrict any changes to the JVCo’s capital structure, such as fresh equity infusions beyond those agreed upon by shareholders.
The company will also have the right to restrict approval or amendments to the annual business plan and distribution strategy, as well as the authority to appoint or remove key management personnel after their initial appointment, in accordance with the joint venture agreement (JVA).
Advisory roles in the transaction were handled by multiple firms. Kotak Investment Banking acted as financial adviser and AZB & Partners served as legal counsel to the Mahindra Group, while Debevoise & Plimpton LLP acted as legal counsel to Manulife.
Upon receiving regulatory approvals, the new Mahindra Manulife joint venture will formally commence operations, marking Manulife’s deeper entry into India’s insurance sector and Mahindra’s diversification within financial services.
