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Monday, Sep 4, 2017

Essel Finance acquires Bimadirect operator for Rs 25-30 crore

[Source : The Economic Times]

Subhash Chandra-owned Essel Finance Management has acquired online insurance agent Coretree Insurance, which operates Bimadirect. Top executives at the companies didn’t reveal the deal value, but an industry expert estimated it at Rs 25-30 crore. The acquisition gives the nonbanking financial services arm of the Zee group an insurance broking license that is a key component of wealth management services.

It will allow Essel Finance compete with the financial institutions of major Indian conglomerates and wealth management portals such as ICICIdirect. Entrepreneurs and investors Amit Pandey and Sudip Bandyopadhyay have made a complete exit from Coretree. Founded in 2011, Bimadirect is an online platform for insurance aggregation or policy comparison, similar to PolicyBazaar and BankBazaar. A person familiar with the matter said it was sold under distress.

The transaction is being carried out in two tranches: it comprises an upfront payment of 75% of deal value and the rest in milestone payments over two years, said Pandey. Bimadirect has so far not made any profit. Last year, it raked in Rs 6-7 crore of insurance premiums from about 90,000 subscribers. It has a 40-member technology team in Hyderabad developing its premium-comparison engine.

Essel Finance that has 75 outlets across 35 cities hopes to target the youth and small and medium enterprises through this platform. “This is an online extension to our offline model,” managing director Amitabh Chaturvedi said.

Essel finance provides wealth management and investment advisory to corporate and retail customers through its branch network. It also offers SME business loans and is also into housing finance, forex, private equity, investment banking, distribution and mutual fund. The company has added four of these functions through acquisitions.

"With the acquisition of Bimadirect. com, we are foraying into digital distribution for mass customer base,” Chaturvedi said. The newly acquired company will report to Brijesh Parnami, the executive director and chief executive of wealth services at Essel Finance.

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