Roadzen Secures ₹40 Crore for India Branch; Prime Securities Serves as Exclusive Advisor
Roadzen, a global company specializing in AI for insurance and mobility, has announced a substantial equity financing commitment for its Indian subsidiary. The investment, amounting to INR 40 crores, is a testament to the promising growth potential of the Indian market for Roadzen.
The Founder and CEO of Roadzen, Rohan Malhotra, hails India as an "incredible growth story" for the company. This investment, he believes, will help capitalize on the opportunity presented by India's high-growth AI sector, which offers superior valuations.
The financing round has exceeded initial targets, indicating strong investor demand. This investment follows the advisory services of BDO for capital raising in India, further demonstrating institutional confidence in Roadzen's leadership and execution.
The India subsidiary of Roadzen serves over 10 lakhs (1 million) new commercial vehicles annually with its DrivebuddyAI solution. This subsidiary's valuation, at approximately INR 740 crores (USD 84 million) pre-money, represents a premium of close to 25% to Roadzen's current Nasdaq market capitalization.
Despite contributing less than 60% of consolidated revenues, the India subsidiary's valuation implies a benchmark of more than USD 2 per share for the global business. Malhotra reiterates that the global business of Roadzen remains significantly undervalued compared to peers.
The financing values the India subsidiary on a standalone basis, with dilution at the subsidiary level limited to approximately 5 per cent, ensuring Roadzen retains close to 95 per cent ownership.
Prime Securities Limited, acting as the exclusive Investment Bank for the transaction, played a crucial role in securing this investment. The transaction, according to N Jayakumar, Managing Director - Group CEO of Prime Securities Limited, validates the intrinsic value of Roadzen's India operations and underscores institutional confidence in the company.
India, being the world's fourth-largest economy and auto market, selling over 40 lakhs (4 million) cars annually, presents a vast opportunity for growth. With GDP doubling and insurance penetration moving towards 3%, the auto insurance market in India could expand eightfold over the next decade.
New regulations, such as AIS-184, are expected to accelerate the adoption of advanced driver safety systems in India, further fueling Roadzen's growth. With non-life insurance penetration in India currently standing at approximately 1% of GDP, there is significant room for expansion.
These financings highlight strong institutional support and reinforce Roadzen's commitment to protecting shareholder value while driving AI-led growth. The investment in Roadzen's Indian subsidiary underscores the company's strategic focus on India and its confidence in the country's growth potential.
Read also:
- Industrial robots in China are being installed at a faster rate than in both the United States and the European Union, as the global market for these robots faces a downturn.
- Hyundai N affirms transition to hybrid performance-centric models, initiating with Tucson N
- EAFO Research Uncovers Crucial Elements in Electric Vehicle Adoption within the EU
- Stock markets in India anticipated a moderate opening, influenced by mixed signals from global markets.
