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Monday, September 12, 2011

Sanlam Group invests in Shriram Capital

Shriram Group has entered into a joint venture with Sanlam Group of South Africa. This deal involves a Rs 2000 crore investment by Sanlam Group in Shiram Capital which is the financial wing of Shriram Group. This would also result in a 26% stake transfer. Though these two companies have been involved in insurance joint ventures before, this is the largest still now. It is for the second time that an outside company will hold stake from Shriram Group. Till a few months back the whole equity is owned by the Shriram Ownership trust until TRG picked 15% stake by investing around Rs 700 crore.

This deal also gives Sanlam Group access to the Indian market. From Shriram Group’s perspective it is a strategic venture which is meant to expand their financial arm. Sanlam’s investment would provide for up-streaming life and general insurance and would also include a cash component. In this way, Shriram Capital would still hold 100% equity which Sanlam Group would indirectly own 26% holding in the insurance venture by virtue of its 26% stake in Shriram Capital. The deal would take six to nine months as they await approvals from IRDA and Sebi

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