Shriram Group to list general insurance arm first, both IPOs in two years | Company News
Financial services conglomerate, Shriram Group, is planning to list its general insurance arm first followed by the life insurance company, Executive Vice Chairman of Shriram Finance Umesh Revankar said on Tuesday.
The two subsidiaries of the Chennai-based firm — Shriram General Insurance and Shriram Life Insurance — are likely to be listed in the next two years as the businesses scale in size, he said.
“Both are doing well. They are profit-making from inception. We have not added any capital in both the companies,” Revankar told reporters during an event.
Shriram Group and South African financial services giant Sanlam jointly own Shriram Life Insurance and Shriram General Insurance.
The Sanlam group recently acquired a stake held by private equity major TPG in the general and life insurance entities.
TPG held 6.29 per cent in Shriram General Insurance and 7.04 per cent in Shriram Life.
Revankar highlighted that currently Shriram Finance, the group’s diversified non-bank finance company (NBFC), does not have plans to tap into the overseas bond market for funds as they are comfortable in raising money from domestic capital markets.
They may, however, weigh options on overseas borrowing once the Federal Reserve cuts rates.
Shriram Finance indicated that it will raise around $1 billion from overseas in the current financial year.
The borrowing would be through a combination of bonds, loans, and asset-backed securities transactions.
“$750 million is the threshold that we can borrow, so we will first exhaust that limit and then we will see. It can be both bonds and loans. We see good opportunities in loans. We also have the ABS market. All the options are available to us but we are not in a hurry,” Revankar said.
“Domestic liquidity is looking good for us. We are quite comfortable,” he said.
Revankar underscored that they are looking to utilise their distribution strength to make their AMC business much larger than what it is now.
“Shriram Finance has 3,000 branches, plus we have the deposit agents and the insurance agents. We are yet to utilise our distribution strength to scale the business but in the next 3-5 years we have a strategy to make this business pretty large,” he elaborated.
Revankar, who is the chairman of Finance Industry Development Council (FIDC), an industry body for NBFCs, said it is working on securing recognition as a self-regulatory organisation (SRO) in the NBFC sector from the Reserve Bank of India.
FIDC indicated that it will apply for an SRO license.
In June, the regulator invited applications from unities to become SRO from the NBFC space. RBI said a maximum of two such entities will get the approval for the sector.
Revankar elaborated that their asset reconstruction company will focus only on acquiring retail assets.
“We would like to buy retail portfolios from other banks and NBFCs but we will be gradual. We will not rush to build scale there,” he added.
First Published: Sep 10 2024 | 7:24 PM IST
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