Global investment firm KKR on Monday announced that it will acquire a 9.99% stake in Shriram General Insurance for Rs 1,800 crore, in a transaction that values the business at approximately Rs 18,000 crore.

Shriram General Insurance (SGI) is a joint venture between Shriram Capital and South Africa’s Sanlam Limited. SGI’s market share in the non-life insurance space stood at 0.79% at the end of the previous fiscal, while the gross direct premium underwritten for 2021-22 stood at Rs 1,752.95 crore. For the nine-month period ended December 2021, the net profit for the company stood at Rs 467 crore.     

Notably, at the end of the last fiscal, SGI’s market share in the non-life insurance space saw a 29 basis points decline from 1.08%. The company’s gross direct premium underwritten for 2021-22 decreased by 18%, from Rs 2,138.88 crore for 2020-21, according to Irdai’s latest data. 

As of December 2021, SGI’ solvency was 4.7 times against Irdai’s stipulation of 1.5 times. The company’s 95% of premium income comes from the transport sector. The net profit for year ended March 2020 was Rs 741 crore, while for March 2021, it was Rs 592 crore due to Covid-related impacts. Its point of sale now is 46,000, and the insurer is planning to increase it to 75,000 by the end of this fiscal.

Anil Kumar Aggarwal, managing director and CEO, Shriram General Insurance, said the company would be looking to benefit from KKR’s global insurance expertise as well as significant experience. “We look forward to collaborating closely to strengthen Shriram General Insurance’s offerings to Indian consumers and achieve continued success,” Aggarwal said.

KKR, in its release, said its investment will position SGI for continued growth in India’s general insurance industry. Gaurav Trehan, partner and CEO of KKR India, said Shriram General Insurance has been one of the standout performers in India’s fast-growing general insurance industry, and continues to build on a record by developing new capabilities, channels and products to meet the growing needs of Indian consumers.

There have been several deals in the general insurance space in the recent past. Future Enterprises on January 27, 2022, announced that it had agreed to sell a 25% stake in Future Generali India Life Insurance Company (FGILICL) to its joint venture partner Generali for Rs 1,252.96 crore, along with an additional consideration that is linked to the date of the closing transaction.

ICICI Lombard had entered into a definitive agreement in August 2020 to acquire Bharti Enterprises-promoted Bharti AXA General Insurance in an all-stock transaction. Based on the share exchange ratio recommended by independent valuers and accepted by the boards of the two companies, the shareholders of Bharti AXA received two shares of ICICI Lombard for every 115 shares of Bharti AXA held by them. Bharti AXA was a joint venture between Bharti Enterprises (51%) and French insurer AXA (49%).

HDFC signed a definitive agreement with Apollo Munich Health Insurance on June 2019 to buy out the entire Apollo Hospitals Group’s stake of 50.8% for Rs 1,136 crore and another 0.4% stake held by a few employees for Rs 10.84 crore.

HDFC ERGO General Insurance in June 2016 announced that it will acquire L&T General Insurance in an all-cash deal worth Rs 551 crore. The company on August 23, 2017 announced the completion of the merger with L&T General Insurance.