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Indian private equity firm True North on Friday said it will sell around 20% of its stake in Niva Bupa Insurance to its UK-based partner Bupa for about 27 billion rupees ($325 million).

The sale will increase Bupa's shareholding in Niva Bupa to approximately 63%, making it the majority shareholder of the business.

The announcement comes after media reports said earlier this year that the business was mulling a minority stake sale at a $2 billion valuation.

Niva Bupa, a joint venture between British United Provident Association (Bupa) and India's True North, offers health insurance through more than 20 bank partners and has over 10,000 hospitals as part of its network.

True North will continue as a minority JV partner, but it was not immediately clear how much stake it will hold in the business after the sale.

"The time is right for Bupa to take a majority shareholding in the business to propel Niva Bupa to its next stage of growth... (which) could also include the public listing of the business," True North said in a statement.

Kotak Investment Banking is the exclusive financial advisor to True North and Niva Bupa, while Rothschild & Co is the exclusive advisor to Bupa on the transaction, the statement added.

True North became Niva Bupa's majority stake owner in 2019, after Max India sold 51% stake in then-called Max Bupa Health Insurance to the fund at an enterprise value of 10.01 billion rupees.

($1 = 83.0727 Indian rupees)