Sanlam (SLM) Status update summary

Strategic developments in India

• MUFG is acquiring a 20% stake in Shriram Finance Limited, injecting approximately $4.4 billion, pending shareholder and regulatory approvals.

• Sanlam is increasing its stakes in Shriram General Insurance and Shriram Life Insurance, including acquiring Piramal's 14.7% interest in Shriram Life, raising its effective economic interest to around 68%.

• A restructuring is planned to separate lending from other interests in Shriram Capital, simplifying ownership and aligning strategy.

• The Shriram Finance share price rose from INR 583 to INR 996 in 2025, reflecting market optimism about these changes.

• Regulatory approvals are progressing, with completion of insurance transactions expected in Q1 2026.

Financial implications and outlook

• Transactions are expected to have a small short-term negative impact on group earnings due to dilution, but long-term growth and profitability are anticipated.

• Initial reduction in return on equity and ROGAV, but annual ROGAV increases of around 0.3% are expected, with a >1% uplift from the MUFG deal.

• Discretionary capital outflow for insurance and Piramal deals is ZAR 5.4 billion; no outflow for the MUFG transaction.

• Group solvency cover decreases by just over 7% but remains within the 150%-190% target range.

• SLIC will be consolidated into financial statements post-Piramal transaction, while SGIC remains equity accounted.

Operational and strategic priorities

• Sanlam and Shriram remain promoters of Shriram Finance, retaining strategic influence.

• MUFG's capital is expected to improve Shriram Finance's credit rating and reduce funding costs over time.

• Strategic focus for insurance businesses includes driving growth, operational excellence, and ecosystem integration.

• Wealth management business is making good organic progress, with profitability expected in 3-4 years.

• No current plans to IPO insurance businesses; listing may be considered for GI business if private equity investors seek exit.