Shriram Life Insurance Company is a venture of Shriram Group and Sanlam Group. The South African firm held 26 per cent stake in life and non-life insurance ventures of Shriram. After the restructuring, SEM's shareholding in Shriram's insurance businesses is held indirectly via its shareholding in Shriram Capital.
The development comes a week after Finance Minister Arun Jaitley said foreign investors could take up to 49 per cent stake in insurance companies. While the announcement was made, the Insurance Bill is yet to be passed in Parliament.
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While Shriram Group officials did not reply till the time of going to the press, a Sanlam spokesperson said: "If regulations are changed to increase the limit placed on the foreign ownership of insurance companies, SEM (Sanlam Emerging Markets) will consider increasing its effective stake in Shriram's insurance businesses. This may be achieved through a combination of an increased stake in Shriram Capital Limited and/or direct stakes in the Shriram insurance businesses".
According to sources, both the groups are in talks to see how the deal could be structured.
Sources said Sanlam infused Rs 60-70 crore into each of these insurance ventures. The insurance sector needs investment to grow. Jaitley had said in his Budget speech the composite cap in the sector would be raised to 49 per cent from 26 per cent, with full Indian management and control.
Shriram General Insurance has reported a 6.08 per cent drop in gross direct premium underwritten to Rs 220.95 crore in April-May 2014, compared to Rs 235.26 crore a year ago.
Shriram Life Insurance has reported Rs 395.37 crore in premium as of March 31, 2014, compared to Rs 420.65 crore a year ago.