Will Look To Start Asset Mgmt Biz With Sanlam Group In India In 3-6 Months: Shriram Capital

Summary

The video discusses significant market gains with the midcap and small-cap indices both up over 1.7%. It covers an exciting joint venture between Chennai-based Shiram Group and South Africa's Sanlam, planning to invest 200 crore rupees in a new wealth management firm. The CEOs of Shiram Capital and Sanlam, along with their regional head, share insights on the venture's progress, potential growth in India's asset management, and insurance sectors. They also touch on regulatory approval timelines, investment strategies, and growth in lending, particularly in commercial vehicle and automobile financing, offering a strong outlook for the future.

Takeaways

• 😀 Chennai Bas Sham Group and South Africa's Sanlam are forming a 50/50 joint venture, Fream Wealth, to offer wealth management solutions in India.
• 😀 The new venture will combine Sanlam's global expertise and the local knowledge of Chennai Bas Sham Group.
• 😀 The joint venture is expected to see significant growth due to the expanding Indian economy, which is set to become the second-largest economy globally.
• 😀 The leadership team and infrastructure for the venture are already in place, with regulatory approvals pending before launching within the next 3 to 6 months.
• 😀 Both parties aim for a 50/50 partnership, ensuring mutual benefit with Sanlam bringing over 100 years of experience to the table.
• 😀 While listing the venture may be considered in the future, both companies are focusing on continued growth rather than short-term market actions.
• 😀 The insurance companies associated with the venture are seeing rapid growth, outperforming the industry, and are currently not focused on listing.
• 😀 The focus of both companies is on strengthening their position in the market, with no immediate plans for public listings despite strong business growth.
• 😀 David Marshall mentioned that, if approved, Sanlam would hold an effective stake of over 50% in two insurance entities (54% and 52%, respectively).
• 😀 The joint venture's greenfield investment in asset and wealth management is estimated to be around $50 to $60 million once regulatory approval is granted.

Q & A

What is the main focus of the joint venture between Shiram Group and Sanlam?

The joint venture between Shiram Group and Sanlam focuses on bringing wealth management solutions to the Indian market. Both companies are investing 200 CR rupees to create a 50/50 partnership in the wealth management space.

How long have Shiram Group and Sanlam been partners?

Shiram Group and Sanlam have been partners for over 20 years, with a strong foundation of loyalty and mutual respect between the two companies.

What are the expected benefits of the partnership between Shiram Group and Sanlam?

The partnership leverages Sanlam's century-long expertise in asset management and Shiram's deep local knowledge. This collaboration aims to address the growing demand for wealth management solutions in India.

When is the joint venture expected to be launched?

The joint venture is expected to be finalized within the next 3 to 6 months, subject to regulatory approvals and the completion of transaction documents.

What is the structure of the joint venture between Shiram Group and Sanlam?

The joint venture will be a greenfield project, with a 50/50 split in ownership. Both parties will bring their expertise and resources to the venture, with Sanlam contributing its international experience and Shiram offering its local market knowledge.

Are there any plans for a public listing of the insurance businesses in the near future?

No, there are currently no plans for a public listing of the insurance businesses. Both Shiram Group and Sanlam are focused on growth and do not see a need to list the companies at this time. A public listing may be considered at a later stage.

What is the strategy behind not focusing on a public listing for now?

The strategy is to maintain focus on the growth trajectory of both the life and general insurance businesses. The companies are not interested in unlocking short-term value through listing but are instead looking for long-term growth in the Indian market.

What is Shiram Group's current stance on unsecured lending in India?

Shiram Group is less concerned about unsecured lending, as it has a very small presence in that sector. The company is more focused on commercial vehicle and automobile financing, which constitutes the majority of its lending portfolio.

How does Shiram Group’s lending portfolio differ from others in the industry?

Shiram Group's lending portfolio is primarily focused on commercial vehicle and automobile financing, with a significant portion of the customers being business-oriented, rather than individual borrowers. This approach reduces the risks associated with unsecured lending.

What is the expected future growth of Shiram Group’s lending business?

Shiram Group expects continued strong growth in its lending business, especially in the commercial vehicle and automobile sectors, due to the solid customer base and access to funding.