Sanlam’s Indian associate gets $4.4bn injection from Japan’s MUFG Bank

Sanlam’s Indian associate, Shriram Finance, will receive a R73bn capital injection from Japan’s MUFG Bank in return for a 20% stake.

The deal will see MUFG pay $4.4bn (R73.5bn) for about 20% of Shriram Finance via the issue of new Shriram Finance shares, subject to shareholder approval, Indian regulatory clearances and other customary closing conditions.

Valued at $170bn, MUFG is one of the world’s biggest diversified financial institutions, with operations in more than 50 countries. The group is headquartered in Tokyo and is listed on the Tokyo, Nagoya, and New York stock exchanges.

Shriram Finance and Sanlam have had a strategic partnership for more than 20 years, anchoring Sanlam’s India investments.

Sanlam holds an aggregate effective interest of about 9.5% in Shriram Finance. Following the MUFG transaction, Sanlam’s effective holding is expected to dilute to about 7.6%.

Sanlam, together with Shriram Ownership Trust and Shriram Capital, are members of the promoter group of Shriram Finance, with a combined shareholding of 25.4%.

Following the MUFG deal, the promoter group’s combined shares will dilute to 20.3%.

“The MUFG transaction is expected to significantly enhance SFL’s capital adequacy, strengthen its balance sheet, and provide a foundation for long-term growth,” Sanlam said in a note to investors.

“The investment is further anticipated to unlock synergies in technology, innovation and customer engagement — driving sustainable growth. It will enhance access to low-cost funding and potentially improve SFL’s credit ratings, while aligning governance and operational practices with global best standards.”

Sanlam believes India is key to its growth into the future. It has invested billions of rand in Shriram over the past two decades, and says it has an unrivalled position in the Indian rural economy, said to constitute about 920-million people.

Together, the companies serve more than 32-million customers across credit, insurance, asset management and wealth management services, supported by more than 4,650 branches and 125,000 agents.

The group last year increased its stake in Shriram General Insurance Company from 40.25% to 50.99% and in Shriram Life Insurance Company from 42.38% to 54.4%.

Sanlam has also signed a deal to acquire an additional 14.72% in SLIC with Piramal Finance, which would take its effective economic shareholding in the entity to 68.41%.

Both sets of transactions are expected to close in the first quarter of 2026 and “will be funded by the group from discretionary capital.”

With Kabelo Khumalo