Patanjali Ayurved and Dharampal Satyapal Group (DS Group) have acquired a 98% stake in Magma General Insurance for ₹4,500 crore, marking a significant expansion into financial services for both conglomerates. The board of directors at Magma General Insurance approved the deal, which sees Adar Poonawalla’s exit from the company.
Adar Poonawalla Exits Magma General Insurance
The transaction involves Sanoti Properties, owned by Adar Poonawalla, selling its interest in Magma General Insurance. Poonawalla, who is the Chairman of Serum Institute of India, highlighted Magma General Insurance’s 26% growth over five years, expressing confidence in its continued success under new leadership.
Patanjali Expands Beyond FMCG and Healthcare
For Patanjali Ayurved, the acquisition is part of a broader diversification strategy. While the company is primarily known for its FMCG, healthcare, and wellness products, its entry into the insurance sector signals a push towards financial services. Leveraging its strong brand presence and consumer trust, Patanjali aims to tap into India’s rapidly growing general insurance market.
DS Group Strengthens Financial Services Presence
For DS Group, which has a strong footprint in food, beverages, dairy, and hospitality, this acquisition represents an expansion into financial services. The company sees potential synergies between its diversified portfolio and the insurance business, aiming to capitalize on India’s booming insurance sector.
Jefferies Optimistic on Patanjali’s Diversification Strategy
Meanwhile, global brokerage firm Jefferies has initiated coverage of Patanjali Foods with a ‘Buy’ rating, setting a target price of ₹2,050 per share—a 19% upside from current levels. Jefferies highlighted Patanjali’s expansion into high-margin segments like food, home, and personal care, which contribute around 60% to its EBITDA and over 70% of its sum-of-the-parts (SoTP) valuation.
Also read: PB Fintech to Invest ₹696 Cr in PB Healthcare
Market Impact and Future Outlook
The Magma General Insurance acquisition marks a pivotal moment for Patanjali and DS Group in the financial sector. Investors are keenly observing the integration strategies, operational plans, and regulatory approvals necessary for a smooth transition. As Patanjali accelerates its expansion into new sectors, its foray into insurance could unlock fresh revenue streams, complementing its existing businesses in FMCG, healthcare, and financial services.
