South Africa's Sanlam hikes stake beyond 50% in Shriram's insurance JVs

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₹2,230.78 crore. Sanlam Emerging Markets Mauritius Ltd said in a statement that it will increase holding in Shriram General Insurance Co. Ltd by 10.74% and in Shriram Life Insurance Co.

Ltd by 12.02%. “This transaction will enable Sanlam to further enhance its position in this important market and drive growth," said the Sanlam statement. The deal involves two parts.

In the first part, Sanlam said it will acquire an effective 6.29% in Shriram General and 7.04% in Shriram Life from existing investor TPG India Investments II Inc, which is a major US-based private equity player. The second part entails acquisition of an effective 4.45% in the general insurance firm and 4.98% stake in Shriram Life from the Shriram Ownership Trust. The deal, Sanlam said, will be funded partly by cash and partly from the proceeds of another transaction within the Shriram Group.

Sanlam Life will dispose of a part of its direct holding in Shriram Finance Ltd (SFL), which took place on 28 March, according to the statement. On 28 March, Sanlam Life sold 1.59% (of its 2.01% direct holding) in SFL to Shriram Value Services (SVS) at the listed market value of ₹2,386 per share, which resulted in gross proceeds of 3.3 billion South African rands ( ₹1,427 crore). SVS is a subsidiary of Shriram Capital Pvt.

Ltd (SCPL) and Sanlam currently owns 40.7% in SCPL while the balance is controlled by Shriram Ownership Trust and its affiliated entities. Sanlam currently owns an effective 26% stake in SVS. On Friday, Sanlam said about 60% of the funding for the latest deal to hike stakes in the two insurance JVs will be coming from the proceeds of this transaction, while the balance 40%, which is about ₹892.31 crore will be funded by other available capital