Investment firm KKR is reportedly closing in on a deal to acquire a 10% stake in Shriram General Insurance .
Shriram Group, an Indian conglomerate, is divesting a stake in its general insurance business as it begins a complex restructuring.
The announcement comes before a potential initial public offering (IPO), which could take place as early as next year, Bloomberg reported citing people familiar with the matter.
KKR’s deal, valued at nearly $237m (INR18bn), may be announced next week, the people said adding that other aspects of the deal such as timing could change.
Notably, South African insurance firm Sanlam has a 23% stake in the general insurer.
Earlier this week, Shriram Group revealed that as part of the group’s restructuring it is merging Shriram City Union Finance and Shriram Transport Finance to create India’s largest shadow lender.
The restructuring includes the separation of Shriram Capital’s financial services, life insurance and general insurance businesses.
The deal will add to KKR’s equity investments in India, which stands at approximately $7bn. Other Indian firms that KKR has invested in include Vini Cosmetics, Lenskart and Five Star, an SME-focused lender.
Earlier this year, the Indian government amended Foreign direct investment (FDI) rules to allow up to 74% foreign ownership in the Indian insurance sector.
With the relaxation in FDI rules and increasing demand for medical and life insurance Indian insurance market is expected to see more deals.
Earlier, media reports emerged that Italian insurance giant Generali is reportedly looking to raise its stake in Indian life and non-life insurance joint ventures (JVs).