TPG Investments exits Shriram Group; Sanlam ups stake in SGIC and SLIC

Private equity firm TPG Investments has completed its exit in Shriram Group companies by selling its entire stakes in Shriram General Insurance Company (SGIC) and Shriram Life Insurance Company (SLIC) to South African financial services group Sanlam, which was one of the major shareholders in these companies. 

The South African financial services group has increased its economic shareholdings in SGIC and SLIC to 50.99 per cent and 54.4 per cent, respectively. The deal is funded partially using the net proceeds from the disposal of its Shriram Finance shares and the balance of the consideration of ZAR 2.0 billion (Rs 892 crore) is funded using a combination of available capital resources.

Sanlam has already entered into a share purchase deal to buy 6.29 per cent in SGIC and 7.04 per cent in SLIC from TPG India Investments, and 4.45 per cent in SGIC and 4.98 per cent in SLIC from the Shriram Ownership Trust. The company currently holds 40.25 per cent economic shareholding in SGIC and 42.38 per cent in SLIC. After the disposal of the part of a direct holding by Sanlam in Shriram Finance (SFL), Sanlam's stake in that company will decrease from 10.19 per cent to 9.54 per cent. Last year, TPG exited Shriram Finance by selling its 2.65 per cent stake in an open market transaction. 

Sanlam Life sold 1.59 per cent (of its 2.01 per cent direct holding) in SFL to Shriram Value Service in March at the listed market value 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 under-penetrated and fast-growing Indian insurance market in line with its stated strategy, set to benefit from several underlying structural tailwinds driving an attractive growth opportunity in insurance.