Piramal Enterprises Ltd is set to divest its stakes in the insurance ventures of Shriram Group for an estimated ₹4,000-5,000 crore, as it aims to concentrate more on its core lending operations. The Ajay Piramal-led group currently holds approximately 15% in Shriram General Insurance Co. Ltd and around 13.3% in Shriram Life Insurance Co. Ltd. To facilitate this sale, Piramal has engaged Avendus Capital and Arpwood Capital as investment bankers to identify potential buyers for its life and general insurance stakes, respectively.
Piramal initially acquired stakes in various Shriram companies over a decade ago, following the sale of its pharmaceuticals division to Abbott Laboratories in 2010. In recent years, the company has successfully sold some of these stakes for profit and has diversified its investments into lending.
The group’s investments in Shriram’s life and general insurance sectors have appreciated significantly, prompting Piramal to consider an exit as its strategic focus shifts. The stakes are expected to be sold separately, with interest from several private equity and strategic investors.
In terms of performance, Shriram Life Insurance reported a new business premium of ₹1,755 crore for FY25 up to January, marking a 24% increase year-on-year. Similarly, Shriram General Insurance recorded a gross premium of ₹3,020 crore during the same period, also reflecting a 24% rise, according to data from the insurance regulator.
While representatives from both Piramal Group and Shriram Group declined to comment, estimates suggest that the general insurance stake could fetch between ₹3,000-4,000 crore, while the life insurance stake might be valued at around ₹1,000 crore. Based on FY24 end figures, the valuation for Shriram Life could range from ₹6,000-10,000 crore, and the general insurance company could be valued between ₹18,000-25,000 crore. Both insurance firms are joint ventures of Shriram Capital and South Africa’s Sanlam Group, which recently increased its stakes in both companies to over 50% by acquiring shares from TPG India Investments and Shriram Ownership Trust.