The Bharti Group is in discussions to divest up to 85 per cent of its life insurance business, Bharti AXA Life Insurance, to UK-based Prudential Plc, according to a report by Economic Times. The potential transaction is estimated to value the company at ₹7,000–8,000 crore, marking a substantial jump from earlier implied valuations and reflecting evolving dynamics in India’s life insurance sector.

This development comes at a time when global insurers are recalibrating their India strategies, and domestic promoters are reassessing capital allocation across businesses. Bharti’s move, if concluded, would effectively mark its exit from the life insurance segment, following its earlier consolidation in general insurance through the ICICI Lombard transaction.

What stands out in the current negotiations is the sharp valuation reset. A 15 per cent stake sale to 360 One last year had implied a valuation of around ₹3,000 crore, or roughly 1.1 times embedded value (EV). The ongoing discussions suggest a potential doubling of that benchmark, aligning with recent transactions in the sector where life insurers are being valued at 1.5–2 times EV.

Embedded value remains a conservative metric as it excludes future business potential. However, the shift in valuation multiples indicates that investors are increasingly pricing in scalability, distribution reach, and long-term profitability rather than just current earnings. This is consistent with recent market activity, including ongoing processes around Canara HSBC Life Insurance and IndiaFirst Life Insurance, which have helped set new valuation benchmarks.

Due diligence is currently underway, although key deal parameters such as final valuation and structure remain subject to change. One constraint in the transaction is the presence of 360 One as an existing investor, which is not expected to exit. This could limit Prudential’s ability to acquire full ownership but still allows for a controlling stake—typically associated with higher valuation multiples.

From an operational standpoint, Bharti AXA Life has shown signs of gradual improvement. The company recently received a capital infusion of ₹461 crore, which strengthened its solvency ratio to 2.41 times as of June 2025. Losses have narrowed, and the company is targeting breakeven in the near term. Total premium income rose 44 per cent in FY26 to ₹1,059 crore, although the base remains relatively small.

However, underlying challenges persist. New business premiums and investment income have remained under pressure, indicating that while growth momentum is improving, profitability and scale are still evolving. This mixed operating profile likely explains why strategic buyers such as Prudential are focusing on long-term potential rather than current performance metrics.

For Prudential Plc, the deal fits into a broader strategic pivot toward emerging markets, particularly India. The company has been actively reshaping its India exposure, including exploring options to pare its 21.93 per cent stake in ICICI Prudential Life Insurance. At the same time, it is expanding its operational footprint through new initiatives such as a health insurance joint venture with an HCL subsidiary.

The appointment of Naveen Tahilyani as regional CEO for India, Africa, and Southeast Asia in 2025 appears to have accelerated this strategy. His track record in scaling distribution and improving profitability in India’s insurance sector is seen as a key driver behind Prudential’s renewed focus on building a multi-line insurance platform in the country.