In a reshaping of its interest in India, South Africa’s second-largest life insurer, Sanlam, is to sell its 26% stakes in Shriram Life Insurance and Shriram General Insurance to its joint venture partner, Shriram Capital.
The sales were prompted by Sanlam’s pending acquisition of a 26% direct stake in Shriram Capital, a move that would have increased its stakes in the two insurance ventures to over the 26% maximum foreign interest permitted in Indian insurers.
While the sell prices of Shriram Life and Shriram General have not been disclosed, Sanlam has announced that its investment in Shriram Capital will amount to INR12.44bn ($235m).
Sanlam CEO Johan van Zyl commented that switching from the insurance ventures to Shriram Capital is in line with Sanlam’s strategy of diversifying across a broader range of financial services.
In addition to the two insurance companies, Shriram Capital is active in asset financing, stock broking, asset management and consumer finance.