this story originally appeared in on apr 10 2017new delhi religare enterprises ltd rel promoted by malvinder and shivinder singh is selling its entire 80 stake in religare health insurance co rhi to a consortium of investors led by private equity firm true north the deal which values the health insurance firm at rs 1300 crore will help bolster the net worth of publicly listed rels nonbanking finance arm religare finvest limited rfl some of the proceeds will be used to repay rels debt the consortium includes domestic investors such as gaurav dalmia and faering capital since commercial launch in july 2012 rhi has reported steady progress and emerged as a leading standalone health insurer in india rel and true north formerly india value fund advisors said in a release the business reported a gross written premium of rs 503 crore for the year ended march 31 2016 stateowned corporation bank and union bank of india own 5 each in rhi while the management has 10 in the form of employee stock options both banks have been partners in the health insurance arm since it was floated in 2012 et broke the story online sunday evening hours before the press release was issuedthey true north and rel have signed the binding agreement on sunday said a person involved in the deal the proceeds will be used for infusing capital in the nonbanking arm rfl it will also be used to repay debt of rel the banks werent part of negotiations but have the right to exit at the same price he said employees too are entitled to sell their stock true north outbid warburg pincus and another foreign pe firm thanks to its home base advantage said the person quoted above jpmorgan was the financial adviser to the deal religare wanted to sell control as it needed funds to revive its nbfc business warburg pincus and other funds couldnt have acquired more than 49 stake in religare health insurance due to the sectoral cap that applies to overseas owners and that tilted the balance in favour of true north said another person familiar with the transaction an indian conglomerate that was also in the race could not match the price true north has been making investments in indias healthcare business it acquired a 40 stake in the kerala institute of medical sciences kims hospital chain for 200 million at the end of marchet had reported on january 7 that the singh brothers were looking to sell management control in key businesses to tide over a cash crunch at the group level the valuation of rs 1300 crore is more than 25 times the capital employed in rhi making it an aggressively priced transaction the company has about rs 525 crore of capital employed in fy2016 it posted revenue of about rs 510 crore fy2017 revenue growth is estimated at about 50 but the company is yet to announce resultssecond deal this is the second transaction by rel in the