Bessemer Ventures & Investcorp-backed Medi Assist Files DRHP for Rs 840-crore IPO

With the coronavirus outbreak accelerating the adoption of health insurance, Bengaluru-based Medi Assist has filed a draft red herring prospectus (DRHP) with the market regulator Sebi to raise around Rs 840 crore through an initial public offering (IPO), sources told Moneycontrol.

If the listing plan fructifies, it will be India’s first IPO by an insurance TPA (third-party administrator). In the past three years, Medi Assist has emerged as the country’s largest health benefits administrator in terms of revenue and premium services for health insurance policies.

“Medi Assist filed its papers with the regulator, late on the evening of May 10, 2021. The IPO consists of a pure OFS ( offer for sale) component and a partial exit by its two private equity investors and selling shareholders Bessemer Ventures and Investcorp is the main trigger,” said one of the sources said.

A TPA is an entity or a firm that processes medical insurance claims. Every insurance company appoints TPAs for settlements of health policy claims. When a claim is filed under a health policy, the TPA manages the documentation and processing and passes on the information to the insurer for settlement.

Bessemer Ventures and Dr Vikram Jit Singh Chhatwal are the promoters of Medi Assist and hold 45.51 percent and 31.63 percent, respectively. Investcorp holds a 21.65 percent stake in the firm.

“They ( Medi Assist) are a market leader and best positioned to capture the growing demand in the segment due to low penetration levels and there will be very strong tailwinds even after COVID-19. This offer should see strong interest,” a second source said.

Confirming the filing of the DRHP, a third individual told Moneycontrol, “ Medi Assist is far ahead of its peers in terms of profits and EBIDTA due to its focus on group and retail insurance accounts as compared to public accounts. It’s a tech-centric firm which has scored high on customer satisfaction.”

Axis Capital, Edelweiss Financial Services, IIFL Capital and SBI Capital were the investment banks working on the IPO, a fourth source said. Law firms Shardul Amarchand Mangaldas and Khaitan & Co were the legal advisers and the bankers while Sidley was the international legal counsel, the source added.

All four individuals spoke on the condition of anonymity.

Moneycontrol is awaiting the response to email queries sent to Medi Assist and the investment banks. This article will be updated to include their responses.  Moneycontrol could not get in touch with Bessemer Ventures, Investcorp and the law firms for immediate comment.

More about Medi Assist 

Dr Chhatwal is the executive chairman and whole-time director of Medi Assist. He was previously associated with Apollo Health Street, Indraprastha Apollo Hospitals, Reliance Capital Limited and Advent India PE Advisors Private Limited

According to DRHP, the company managed Rs 7829.5 crore of health insurance premiums for the financial year 2020. Based on premiums under management for FY 20, it had a market share of 29 percent of the private health insurance market serviced by health benefits administrators in India.

The firm serviced over 7,800 corporates across sectors and the vertical accounted for more than 60 percent of revenues. As of December 31, 2020, 48,892 insurance agents and 106 brokers were registered with the firm. Medi Assist’s main rivals include MD India Health Insurance TPA Private Ltd, Family Health Plan Insurance TPA Private Ltd and Health India Insurance TPA Services Private Ltd.

On March 9, 2021, Moneycontrol reported Vidal Health TPA’s buyout of Vipul Medcorp TPA for an undisclosed amount.