Sanlam boosts India strategy with Shriram Finance deals

JSE-listed insurance and financial services giant Sanlam has announced a series of transactions in India, including the introduction of a strategic minority investor into Shriram Finance Limited and progress on its planned increase in shareholdings in Shriram’s insurance businesses.

The board of directors of Shriram Finance Limited has approved entering into definitive agreements with Mitsubishi UFJ Financial Group Bank, which will become a minority investor through a preferential allotment and subscription for new equity shares representing approximately 20% of the total issued share capital of Shriram Finance Limited, on a fully diluted basis.

Read:
Sanlam profit rises to record on India growth, Africa recovery
Sanlam eyes India wealth management

Mitsubishi UFJ is one of the world’s largest financial institutions, headquartered in Tokyo and listed on the Tokyo Nagoya and New York stock exchanges with a market capitalisation of around $170 billion (R2.8 trillion).

The transaction is expected to result in a capital injection of approximately $4.4 billion (R73.5 billion), subject to shareholder approval, Indian regulatory clearances and other customary closing conditions.

Sanlam’s share price traded at R97.73 at around 11am on Monday, just over 1.4% weaker.

Shriram acquisitions

At the same time, Sanlam provided an update on its previously announced intention to acquire additional interests in Shriram General Insurance Company and Shriram Life Insurance Company, as well as a separate share purchase agreement to acquire a further stake in Shriram Life Insurance Company from Piramal Finance Limited.

All the insurance transactions are subject to regulatory approvals and are expected to close in the first quarter of 2026.

Sanlam says the transactions will significantly strengthen Shriram Finance Limited, which is an integral part of the Shriram ecosystem in India, and reinforce Sanlam’s strategic leadership position in the Shriram insurance companies.

Shriram Finance Limited is listed on the National Stock Exchange of India and BSE Limited, with a market capitalisation of approximately $18 billion (R300.8 billion), and is a leading non-banking financial company offering credit solutions including commercial vehicle finance, two-wheeler and car loans, home loans, gold loans, personal loans and small business loans.

Read: Sanlam’s deal for controlling stake in Indian insurer Shriram

Sanlam, together with Shriram Ownership Trust and Shriram Capital Private Limited, forms part of the promoter group of Shriram Finance Limited, with a combined shareholding of 25.4%.

Diluted shareholding

Sanlam currently holds a 40.7% stake in Shriram Capital Private Limited, alongside a direct interest of 0.4% held through Sanlam Life Insurance Limited, giving the group an aggregate effective interest of approximately 9.5% in Shriram Finance Limited.

Following completion of the Mitsubishi UFJ Financial Group Bank transaction, Sanlam’s effective shareholding in Shriram Finance Limited is expected to dilute to approximately 7.6%, while Shriram Ownership Trust will hold an effective interest of about 12.7%.

The promoter group will retain a combined effective interest of around 20.3%. Mitsubishi UFJ Financial Group Bank will not be classified as part of the promoter group.

Sanlam says the investment is expected to enhance Shriram Finance Limited’s capital adequacy, strengthen its balance sheet and provide a foundation for long-term growth, including through improved access to low-cost funding and potential improvements in credit ratings.

Appeal withdrawn

Sanlam also says the Insurance Regulatory and Development Authority of India withdrew its appeal regarding the proposed structure of the insurance transactions on 18 November 2025.

Sanlam now expects the transactions to be reviewed by the regulator and anticipates approval in due course. Once completed, Sanlam’s effective economic interests in Shriram General Insurance Company and Shriram Life Insurance Company will increase to 50.99% and 53.69% respectively.

In addition, Sanlam has entered into a share purchase agreement with Piramal Finance Limited – a prominent Indian non-banking financial company – to acquire an additional 14.72% stake in Shriram Life Insurance Company.

Upon completion of all the insurance transactions, Sanlam’s effective economic interest in the life insurer will increase to 68.41%, positioning it as the controlling shareholder.

Sanlam says India remains a core market and strategic pillar for its long-term growth and value creation, with Shriram continuing as its strategic partner in the country.

The transactions fall below the Category 2 threshold in terms of the JSE Listings Requirements and were therefore disclosed on a voluntary basis.

Read: Sanlam banks on India as SA market reels

Follow Moneyweb’s in-depth finance and business news on WhatsApp here.