: City based non-banking finance company Sundaram Finance which holds majority stake in Royal Sundaram Wednesday said it has signed an agreement with Ageas International to divest 40 per cent stake for a total consideration of Rs 1,520 crore.
Currently, Sundaram Finance Ltd holds 75.90 per cent in Royal Sundaram and proposes to divest 25.90 per cent, thereby retaining 50 per cent of its holding post the divestment.
Some of the existing shareholders will hold the remaining 10 per cent in Royal Sundaram.
Royal Sundaram is a player in the general insurance market with strong positions in motor and health insurance portfolios.
Royal Sundaram has more than 5,600 agents and 700 branches consisting of its own and those of Sundaram Finance Ltd.
For the year ending March 31, 2018 Royal Sundaram generated gross written premium of Rs 2,643 crore and achieved a PAT of Rs 83 crore while registering an average annual growth of 19 per cent and 56 per cent in GWP and profits respectively between 2015 and 2018.
The financial transaction is subject to certain conditions to close including the approval of IRDA and the transaction is expected to close in the first quarter of 2019, the statement said.
Commenting on the agreement, T T Srinivasaraghavan, Managing Director, Sundaram Finance Ltd, said 'for the next phase of growth, we are delighted to be partnering with Ageas, whose global experience, including in several Asian countries, will be an asset.
"Ageas is unique in its approach of working through local partnerships and joint ventures across Asia and we believe this can create significant value for Royal Sundaram."
Over the past 18 years, Royal Sundaram has built a sterling reputation in the market for its customer service excellence, notably in claims management, he said.
The company has demonstrated strong growth in its chosen segments and is witnessing a rapid growth in its profitability,", he added.
Ageas CEO, Bart De Smet said, "Partnering with Sundaram Finance, a well-established company with a vast knowledge of the Indian insurance market offers us a great opportunity to benefit from the potential of what is one of the world's largest economies with an insurance industry that is expected to grow significantly in the coming years."
"We are confident that Ageas's insurance expertise combined with Sundaram Finance's market knowledge and position will take Royal Sundaram to the next level in terms of size and profitability," he added.
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