Axis is planning to take a 10% stake for around $9 million in the start-up’s upcoming life insurance business, effectively valuing the business at $90 million, said the two sources, who declined to be named as the talks were private.

The move comes after India’s biggest private lender 

HDFC Bank NSE -0.45 % said in a stock exchange disclosure last week that it planned to buy a 9.94% stake in Go Digit Life for up to 700 million rupees ($9 million).

Start-up Digit, which already works in the general insurance business, is foraying into the life insurance market with its “Go Digit Life” venture..

A Digit spokesperson declined to comment, saying the company had not yet received a licence for its life insurance business. Axis did not respond to Reuters’ request for comment.

Go Digit General Insurance, Digit’s general insurance business, says it is valued at $4 billion and backed by Canadian billionaire Prem Watsa and Sequoia Capital. It offers products such as health, travel and automobiles coverage.

Axis’ plans underscore growing interest in India’s lucrative insurance business from private lenders, one of the sources said, adding that the partnership with Digit could help Axis fulfill its insurance ambitions.

India’s life insurance market, the world’s tenth biggest, remains largely untapped. Life insurance penetration – which is measured by the country’s life insurance premium as a percentage of its gross domestic product – grew to 3.2% in the fiscal year to 2021, up only slightly from 2.15% two decades ago, according to data from India’s insurance regulator.

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