Piramal Enterprises to exit Shriram insurance ventures, sell stakes for up to Rs 5,000 crore: Report

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Piramal Enterprises Ltd is planning to sell its stake in Shriram Group's insurance ventures for Rs 4,000-5,000 crore, Live Mint has reported, aiming to focus more on its core lending business.

The Ajay Piramal-led group owns nearly a 15 percent stake in Shriram General Insurance Company and around 13.3 percent in Shriram Life Insurance Company.

Avendus Capital and Arpwood Capital have been appointed as investment bankers to find buyers for the stakes, the report cites sources as saying.

The move comes more than a decade after Piramal acquired stakes in several Shriram companies after selling its pharmaceutical business to Abbott Laboratories in 2010. Since then, the company has sold some of these stakes at a profit and invested in other business, including lending.

Piramal's investments in both life and general businesses of Shriram have now significantly appreciated and the company is now keen to exit. "The two bunches of stakes in Shriram are likely to be sold separately. There are several private equity and strategic entities which have shown interest in buying the stakes," the report quotes a source as saying.

The person familiar with the matter said the general insurance stake sale could be worth Rs 3,000-4,000 crore, while the life insurance stake may be worth around Rs 1,000 crore, considering the premium the buyer has to pay for the bulk stake sales. "If one considers the FY24 end numbers, the valuation of Shriram Life could be Rs 6,000-10,000 crore and the value of the general insurance company of Shriram Group could be Rs 18,000-25,000 crore," the person added.

Moneycontrol couldn't independently verify the report.

South Africa's Sanlam Group increased its stake in both Shriram General Insurance Company and Shriram Life Insurance Company to over 50 percent last year after purchasing stakes from TPG India Investments and Shriram Ownership Trust.

"Piramal Enterprises is consolidating its financial services business by merging with its housing finance arm Piramal Capital and Housing Finance Ltd and rebranding the merged entity as Piramal Finance Ltd, simplifying the group structure and providing shareholders with direct access to the entire lending business. This strategic move is also aimed at eliminating cost duplication, enhancing operational efficiency, and improving customer experience," teh report quoted another source as saying.