Private equity firm TPG Investments has completed its exit from Shriram Group companies by selling its entire stake in Shriram General Insurance Company (SGIC) and Shriram Life Insurance Company (SLIC) to South African financial services firm Sanlam, one of the largest shareholders in the company. these companies.
The South African financial services company has increased its economic stake in SGIC and SLIC to 50.99 percent and 54.4 percent respectively. The deal will be partly financed using the net proceeds from the sale of Shriram Finance’s shares and the balance of the consideration of ZAR 2.0 billion (Rs 892 crore) will be financed using a combination of available capital resources.
Sanlam has already entered into a share purchase agreement to buy 6.29 percent in SGIC and 7.04 percent in SLIC from TPG India Investments, and 4.45 percent in SGIC and 4.98 percent in SLIC from Shriram Ownership Trust. The company currently has an economic stake of 40.25 percent in SGIC and 42.38 percent in SLIC. Following the sale of Sanlam’s direct holding stake in Shriram Finance (SFL), Sanlam’s stake in that company will decrease from 10.19 percent to 9.54 percent. Last year, TPG exited Shriram Finance by selling its 2.65 percent stake in an open market transaction.
Sanlam Life in March sold 1.59 percent (of its direct stake of 2.01 percent) in SFL to Shriram Value Service at the market cap of Rs 2,386 per share, resulting in gross proceeds of ZAR 3.3 billion (Rs 1,427crore ).
According to the company, the deal increases Sanlam’s exposure to the underpenetrated and fast-growing Indian insurance market, in line with its stated strategy, which will benefit from a number of underlying structural tailwinds that will drive an attractive growth opportunity in the insurance sector.
First print: April 5, 2024 | 7:35 PM IST