MC Exclusive | Shriram Group receives IRDAI approval for merger

The Shriram Group has received approval from Insurance Regulatory and Development Authority of India (IRDAI) for the proposed amalgamation of group companies, Shriram City Union Finance Managing Director and  Chief Executive Officer Y S Chakravarti told Moneycontrol on July 28.

Following the approval from IRDAI, Shriram Group companies now require regulatory approvals from National Company Law Tribunal (NCLT) and Competition Commission of India (CCI), the MD said, adding the merger will likely be completed by September end.

As per Shriram Transport Finance Vice-Chairman and CEO Umesh Revankar, the IRDAI approval was necessary in the proposed merger as the group has two insurance companies— Shriram Life and Shriram General Insurance—which will continue being independent entities post merger, as part of amalgamation plan.

For the financial year ended March 2022, Shriram General Insurance Company’s gross written premium stood at Rs 1,753 crore, lower than Rs 2,139 crore a year ago. Net profit for the previous fiscal stood at Rs 663 crore, higher than Rs 592 crore in FY21. Meanwhile, per Shriram Life Insurance Company’s FY21 annual report, its total premium income stood at Rs 2,018 crore as on March 31, 2021, higher than Rs 1,729 crore a year ago. The insurer’s profit after tax for FY21 stood at Rs 106 crore.

Shriram Group's board had on December 13 approved the long-anticipated merger of its lending subsidiaries Shriram Capital (SCL) and SCUF with STFC, pending regulatory and shareholders’ approval. The merged entity would be known as Shriram Finance.

The merged entity would have a combined AUM of over Rs 1,50,000 crore, over two crore customers served till date and a distribution network of over 3,500 branches. All of these would be serviced by a team of over 50,000 employees.

While Revankar would be the vice-chairman of the merged entity, Chakravarti will be the MD and CEO of Shriram Finance.