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Medi Assist’s subsidiary, Medi Assist TPA acquires Paramount TPA for ₹311.8 crore, increasing its market share to 23.6%. Funded through internal accruals and short-term debt, the acquisition will enhance Medi Assist's presence in the health insurance sector by FY2025.
Medi Assist, India's largest third-party administrator (TPA), announced on Monday that its wholly-owned subsidiary, Medi Assist TPA, has signed a definitive agreement to acquire Fairfax Asia-backed Paramount TPA.
The all-cash deal is valued at ₹311.8 crore and will be funded through a combination of internal accruals and short-term debt. Medi Assist share price remains in focus following the announcement.
The acquisition of Paramount TPA, which is the second-largest TPA by premiums in the group health insurance segment as of FY24, will significantly boost Medi Assist's market share. With this deal, Medi Assist will add a 6.2% market share in the group segment, bringing its total share to 36.6%.
Additionally, this move increases Medi Assist's overall health insurance industry market share by premium managed in India to 23.6% as of FY24.
Paramount TPA manages ₹3,866 crore of total premiums for both group and retail segments, with a revenue from operations of ₹153 crore in FY24. The company works with 30 insurers and serves over 3,000 group customers and retail policyholders.
This acquisition marks Medi Assist's second major move in the TPA space, following its purchase of Raksha TPA in March of the previous year. The Raksha acquisition strengthened Medi Assist’s presence in North and Central India.
The TPA sector, characterised by thin margins, is witnessing consolidation driven by the need for scale, heavy investments in technology, and the demand for high-quality customer service. This acquisition further solidifies Medi Assist's position as a leader in the industry.
On Monday, Medi Assist's share price closed at ₹565.75, down by 0.75%. Despite the slight dip, the stock has delivered a return of 21.90% over the past 12 months, reflecting investor confidence in the company's strategic moves and growth prospects.
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