Global investment major KKR & Co has entered an agreement to acquire 9.99 per cent stake in Shriram General Insurance (SGI) for about Rs 1,800 crore. KKR will acquire the stake owned by Shriram Capital in Shriram General Insurance.
“KKR’s investment will position Shriram General Insurance for continued growth in India’s fast-growing general insurance industry,” the company said in a statement. The agreement is subject to the receipt of the necessary regulatory approvals. The company was valued at around Rs 18,000 crore as part of the deal.
“We are delighted to welcome KKR as our investor, and look to benefit from their global insurance expertise, as well as significant experience taking Indian companies to the next level. We look forward to collaborating closely to strengthen Shriram General Insurance’s offerings to Indian consumers and achieve continued success,” said Anil Kumar Aggarwal, managing director and chief executive officer of Shriram General Insurance.
Founded in 2008, Shriram General Insurance is a joint venture between Shriram Capital, the holding company for Shriram Group’s financial services business, and Sanlam, a leading pan-African financial services group.
KKR’s investment builds on strong tailwinds in the Indian general insurance industry and SGI’s continued expansion into new segments and investment in its digital capabilities to meet the evolving needs and preferences of Indian consumers, the statement said. It added that the company is adopting a customer-centric approach towards business and is focused on nurturing homegrown talent and maximizing technology to meet the needs of underserved segments of the economy.
“Shriram General Insurance has been one of the standout performers in India’s fast-growing general insurance industry, and continues to build on their record by developing new capabilities, channels, and products to meet the growing needs of Indian consumers,” said Gaurav Trehan, Partner and CEO of KKR India. “We are truly excited to work with the Shriram Group and SGI’s high-quality management team to achieve their vision of serving their customers, and look forward to sharing our experience to take the company to new heights,” he added.
This comes close to the announcement of the merger of Shriram Capital Ltd (SCL) and Shriram City Union Finance Ltd (SCUF) with Shriram Transport Finance Ltd (STFC) as part of restructuring in the group. The new entity, which will be the largest retail non-banking financial company (NBFC) in India, will be named Shriram Finance Ltd (SFL). Recently, Umesh Revankar, Vice Chairman and managing director, Shriram Transport Finance, had told Business Standard that the company is moving to NCLT for clearances and the final nod may happen by around October - November this year.
Some of KKR’s investments in the sector have included Housing Development Finance Corporation, a leading housing finance company, SBI Life Insurance, a joint venture between the State Bank of India and BNP Paribas Cardif, Max Life, one of India’s largest private life insurance players, through Max Financial Services, and Five-Star Business Finance, a leading lender to small businesses. Since setting up its Mumbai office in 2009, KKR has made more than 20 investments in India with more than a dozen active portfolio companies now.
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