Magma HDI General Insurance, a joint venture between Mumbai-based Magma Fincorp and German insurer HDI Global, has raised INR 525 crores (around USD 72 million) in its latest funding round.

The capital raise was led by ICICI Venture and Morgan Stanley Private Equity Asia, along with the Cyza Chem (a Poonawalla Group company) and two family offices.

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The transaction included a primary capital raise of INR 250 crores (around USD 34 million) and a secondary raise of INR 275 crores (around USD 38 million) in order for Magma Fincorp to comply with government ownership regulations in the insurance sector.

Rajive Kumaraswami, chief executive officer and managing director of Magma HDI said that he welcomed the new shareholders and appreciated “continued support from our existing shareholders.”

“The growth capital which the investors bring on board will enable us to expand the business and explore new opportunities,” said Kumaraswami. “The insurance sector is poised to see exponential growth given the low penetration and the trigger of the pandemic, which has led people to look at insurance as protection.”

For his part, Puneet Nanda, CEO and MD of ICICI Venture, said that his firm is “excited about the prospects offered by the under-penetrated Indian insurance sector.”

“We look forward to working with the board and the team of Magma HDI General Insurance in their quest for accelerated growth and keen desire to make a mark in the Indian GI market whilst meeting the protection needs of the Indian customer,” said Nanda.

Nirav Mehta, MD of Morgan Stanley Private Equity Asia, added that the general insurance sector in India is poised for a structural growth phase, making Magma HDI “well-placed to tap this opportunity given its management strength, careful product selection, prudent underwriting, and distribution network.”

“We are excited to partner with Magma HDI in its next phase of growth,” said Mehta.