Shriram group to divest 20 percent in Shriram Capital to Sanlam
By IANSWednesday, January 12, 2011
CHENNAI - The city-based Shriram group plans to divest around 20 percent in its financial services business holding company, Shriram Capital, for around Rs.900 crore ($200 million) in favour of South African insurance group Sanlam.
Confirming the development, S.P. Raghunathan, a director in the Shriram group, told IANS: “Talks are on with the Sanlam group. The enterprise valuation of Shriram Capital is around Rs.5,000 crore.”
Shriram Capital is the holding company for the group companies involved in the financial services like Shriram Life Insurance, Shriram General Insurance, Shriram Transport, Shriram City Union Finance, Shriram Wealth Management, Shriram Fortune Solutions and Shriram Insight Share Brokers.
The Indian group plans to use the funds to expand its insurance broking and other financial services business lines and also foray into the banking sector.
A stronger tie-up with the Sanlam group would enable Shriram to look at the insurance business in the overseas markets.
On a consolidated basis, Shriram Capital has a customer base of 6.4 million and a net profit of over Rs.10 billion.
