Oct 28: InsuranceDekho and RenewBuy are nearing a merger that could significantly enhance their position in the insurance aggregation market, directly challenging the market leader, PolicyBazaar.

According to a Mint report, the combined valuation of the merger is projected to exceed Rs 8,000 crore (approximately $950 million), with RenewBuy valued at around Rs 3,000 crore and InsuranceDekho at over Rs 5,000 crore. 

If completed, this merger would make the new entity the second-largest insurance aggregator in India.

The transaction is expected to be a mix of cash and stock, with some early investors in RenewBuy likely to sell part of their stakes. The merged company is also anticipated to attract further investment ahead of a potential initial public offering (IPO), the report added.

Additionally, this merger could facilitate CarDekho's IPO plans, as the company is aiming for a public listing in the upcoming fiscal year. Currently, Amit Jain, co-founder and CEO of CarDekho, holds over 70% of InsuranceDekho and plans to reduce his stake by more than 20% before submitting the Draft Red Herring Prospectus (DRHP).

This announcement follows InsuranceDekho’s recent acquisition of a composite insurance broking license from the Insurance Regulatory and Development Authority of India (IRDAI).

In terms of funding, InsuranceDekho raised $60 million in a Series B round led by Mitsubishi UFJ Financial Group in October last year. RenewBuy raised $40 million in its ongoing Series D funding round in July of last year.