Financial services conglomerate Shriram Group plans to list its general insurance division first, followed by the life insurance company, Shriram Finance Executive Vice President Umesh Revankar said on Tuesday.
The Chennai-based company’s two subsidiaries, Shriram General Insurance and Shriram Life Insurance, are likely to go public in the next two years as the businesses scale up, he said.
“Both companies are doing well. They are profitable from the start. We have not added capital to either of them,” Revankar told reporters at an event.
Shriram Group and South African financial services giant Sanlam jointly own Shriram Life Insurance and Shriram General Insurance.
Sanlam Group recently acquired a stake held by leading private equity group TPG in life and general insurance companies.
TPG owned 6.29 per cent of Shriram General Insurance and 7.04 per cent of Shriram Life.
Revankar highlighted that currently Shriram Finance, the group’s diversified non-banking financial company (NBFC), has no plans to tap the foreign bond market for funds as they are comfortable raising money from domestic capital markets.
However, they may consider overseas borrowing options once the Federal Reserve cuts rates.
Shriram Finance said it will raise around $1 billion from overseas in the current financial year.
The lending would be done through a combination of bonds, loans and asset-backed securities transactions.
“The limit that we can borrow is $750 million, so we will exhaust that limit first and then we will see. It can be both bonds and loans. We see good opportunities in loans. We also have the ABS market. We have all the options available, but we are in no hurry,” Revankar said.
“We think domestic liquidity is good. We are quite comfortable,” he said.
Revankar stressed that they are looking to use their strength in distribution to make their AMC business much bigger than it is now.
“Shriram Finance has 3,000 branches, besides deposit agents and insurance agents. We still need to use our distribution strength to expand the business, but in the next 3-5 years we have a strategy to make this business quite big,” he explained.
Revankar, who is the chairman of the Financial Industry Development Council (FIDC), an industry body for NBFCs, said he is working to secure 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 entities in the NBFC sector to become SROs. The RBI said a maximum of two such entities will be granted approval for the sector.
Revankar explained that his asset reconstruction company will focus solely on acquiring retail assets.
“We would like to buy retail portfolios from other banks and NBFCs, but we will do it in a phased manner. We will not rush to scale up there,” he added.
First published: September 10, 2024 | 19:24 IS
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