Medi Assist shares jump 14% to fresh peak, largest single-day gain in 8 months. Here’s why

Shares of Medi Assist Healthcare, a leading health-tech and insurance-tech company, surged 14% in early morning trading on Tuesday, reaching a new all-time high of ₹639 per share, which is the biggest intraday jump in eight months. 

This rise followed the company’s announcement on Monday that its wholly owned subsidiary, Medi Assist Insurance TPA Private Limited, had signed a definitive agreement to acquire 100% of Paramount Health Services & Insurance TPA Pvt. Ltd.

Paramount Health, a major player in the third-party administration (TPA) sector, is owned by Fairfax Asia and the Shah family. As the fourth-largest TPA by total revenue and the second largest in the group segment by premiums in India (as of FY24), Paramount manages ₹34 billion in group segment premiums, ₹4.5 billion in retail segment premiums, and administers benefits for various government health schemes, including MJPJAY (Maharashtra).

According to the company's exchange filing, in FY24, Paramount held a market share of 6.3% in the group segment and 4% of the total health insurance industry by premiums.

Market share to jump

With this acquisition, Medi Assist's TPA market share is expected to grow 36.6% in the group segment and 23.6% in the overall health insurance industry by premiums managed.

This strategic acquisition is expected to enhance Medi Assist’s technology, automation capabilities (AI/ML), and provider networks, positioning the combined business as a key long-term partner to insurers across general, standalone health, and life segments. The acquisition, one of the largest TPA deals in India, is valued at an enterprise value of ₹311.8 crore, with the equity value expected to exceed ₹400 crore, pending regulatory approval from IRDAI.

“Paramount TPA's 28 years of leadership in the TPA industry stand as a testament to its success. Our COO, Atman Shah’s leadership, has been instrumental in the growth of the business. The coming together of two leading TPAs will go a long way in delivering on the promise of insurance for all by 2047,” said Dr Nayan Shah, MD, Paramount TP.

“This strategic move strengthens our market leadership and aligns with our long-term vision of making quality healthcare accessible and efficient. I welcome the Paramount team to the Medi Assist family and to achieving greater milestones,” said Satish Gidugu, CEO of Medi Assist.

Trades 45% above IPO price

The company's shares debuted on the Indian stock exchanges in January at ₹464 per share, compared to the listing price of ₹418 per share. Currently, the stock is trading 45.2% above its IPO price.

Medi Assist provides TPA services to insurance companies through its wholly-owned subsidiary, Medi Assist TPA. As a health benefits administrator, the company offers services to employers, self-funded plans, and insurers across a global network of healthcare providers. Additionally, through its subsidiary Mayfair We Care, the company delivers TPA services to International Private Medical Insurance (IPMI) in 148 countries.

For the quarter ending in June, the company reported total revenue from operations of ₹168 crore, up from ₹141 crore in the same period last year. Net profit slightly increased to ₹19 crore from ₹18 crore in Q1 FY24.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.