Allianz breaks up with India’s Bajaj

Good morning, and let’s jump right into today’s newsletter. Sunil Mittal, who is the single-largest shareholder in the UK telecommunications major BT, is looking to expand his stake further. But first, I speak to Sanjiv Bajaj about the break-up with Germany’s Allianz.

Break-up and prosper

After 24 years, Munich-based insurer Allianz and its Indian partner Bajaj Finserv are breaking up. The companies announced a $2.83bn deal in which Bajaj will be buying out Allianz’s stakes in their general and life insurance subsidiaries, leaving the Indian group as the sole owner of both units. 

The split comes after India opened up its insurance sector to 100 per cent foreign investment last month, having progressively expanded this since a 26 per cent cap in 2001. A 2020 rule, which prevented foreign investors that had exited local businesses from re-entering for two years, was also lifted last year. With these restrictions eased, Allianz had reportedly been keen on increasing its stake in the joint venture, which was a significant player in both the life and general insurance segments. Bajaj was unwilling to dilute its holding. 

Bajaj Finserv will be using internal accruals to pay for the acquisition. But this outlay will not come at the cost of funding future growth, the company’s managing director Sanjiv Bajaj told me, saying the group was “adequately capitalised”. I also asked him about a move by regulators to have the country’s top insurers sketch out road maps for potential public listing. He said the company’s board would consider this “nudge” for an initial public offering once the split with Allianz, which is still awaiting regulatory clearance, is complete.

Bajaj’s former partner, Allianz, is likely to become a competitor. The German company said it was thinking about using the money from the sale to fund potential new opportunities in India, and had ambitions to “serve not only as an investor but also as an operator”. Local media has speculated that Allianz is hoping to re-enter the market with Ambani-owned Jio Financial Services, especially since Mukesh Ambani had expressed his interest in the insurance sector a couple of years ago. Industry insiders confirm that talks are on between the two. Allianz declined to comment.

Sanjiv Bajaj told me he was not worried about foreign competition, and was certain that as India’s economic prospects grew, the market for insurance was going to get substantially larger. “Large foreign players have seen economic cycles over a long term, and they bring with them their experience in handling this. I see the pie expanding dramatically and the industry maturing with their entry,” he said.

The industry had grown about 30 times in size since it first opened to foreign investment in 2001, with nearly 60 players today, Bajaj noted. According to the industry regulator, profits in the life insurance industry grew 10.74 per cent last year. After two years of posting losses, general insurance companies too turned profitable in 2024, with a substantial chunk of industry profits coming from private insurance companies. 

All of this bodes well for consumers too, since higher competition will foster competitive pricing and better industry practices. The “conscious uncoupling” of Bajaj Allianz is certain to be the first of many big announcements in the insurance sector in India. 

Do you think all this action in the insurance industry will make it more customer friendly? (Or do you have any horror stories to share?) Write to us at indiabrief@ft.com.

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Mittal wants more

Sunil Mittal, who has a 24.5 per cent stake in BT, is looking to buy more. The founder and chair of India’s Bharti Enterprises has privately talked about his interest in increasing his stake in the British telecom group, the FT reported this week. 

Mittal took a 10 per cent holding last year, and is increasing it to 24.5 per cent after securing the necessary national security approvals. James Ratzer, an analyst at New Street Research, estimates that Mittal has so far converted about 16 per cent of his stake — partly procured through derivatives contracts — into equity. Under UK rules, he would have to make an offer for the whole of BT should his stake, which is held via Bharti Enterprises, exceed 30 per cent. 

Last August, Bharti said it did not intend to make such an offer. But should Mittal change his mind about investing more, he would probably have the funds to do so. His flagship company, Bharti Airtel, has enjoyed a strong run, announcing a whopping 505 per cent year-on-year rise in net profits for the third quarter. The surge came on the back of growth in its operations in Africa and at home, where the company’s revenues were boosted by a rise in telecom tariffs. 

Expanding its position in BT would make business sense. Under current chief executive Allison Kirkby, BT’s share price has risen by more than 50 per cent. She has committed to cost savings of £3bn by the end of 2029 and reducing the company’s workforce by about a third by 2030. It is no wonder that Mittal has taken a “hands-on” approach to his investments, meeting more than a dozen senior staff members to discuss strategy.

It was not so long ago when Indian conglomerates were on a global shopping spree: the Tatas bought English tea brand Tetley, and Jaguar and Land Rover from Ford, the Mittals bought steelmaker Arcelor and Birla’s Hindalco bought Novelis. If Mittal does eventually make a bid for BT, could it mark a throwback to those halcyon days in the noughties?

Go figure

The world happiness rankings for 2025 were released on Wednesday. India ranked a lowly 118 out of 147 countries. (Looks like proximity to the Arctic Circle is key to being happy.)

Read, hear, watch

I was slowly working my way through Oscar winner Steven Soderbergh’s Mosaic (on JioHotstar). In this murder mystery, Sharon Stone (stunning, as always), plays a popular children’s book author who lives in a large estate in rural Utah. The show is beautifully shot, with riveting characters and twists and turns. However, my social media feeds then began getting inundated with raves about Adolescence, the new Netflix hit, and being the fickle-minded person I am, I have (temporarily) abandoned Mosaic to watch it.

Adolescence too is a murder mystery, but one that is a commentary on current day teenagers and the perils of their internet use — from toxic masculinity to social media bullying. By the time you read this, I’ll have finished all four episodes, so do write in and tell me what you think. It’s intense!

I am ready for some laughs now. What can be better than Seth Rogen and a satire about Hollywood?

Buzzer round

What touched an 800,000-year high in 2024, illustrating the alarming impact of climate change?

Send your answer to indiabrief@ft.com and check Tuesday’s newsletter to see if you were the first one to get it right.

Quick answer

On Tuesday, we asked: Do you think Elon Musk should have stuck to tending to his businesses? Here is how you voted.

Thank you for reading. India Business Briefing is edited by Tee Zhuo. Please send feedback, suggestions (and gossip) to indiabrief@ft.com.