Sanlam (SLM) Status update summary

Strategic developments in India

• MUFG plans to inject $4.4 billion into Shriram Finance for a 20% stake, pending shareholder and regulatory approval, expected to improve credit rating and reduce funding costs over time.

• Sanlam's direct holding in Shriram Finance will decrease from 9.5% to 7.6% due to dilution, but strategic influence is retained through promoter status with Shriram Ownership Trust.

• Sanlam and Shriram agreed in principle to restructure, separating lending from other interests, simplifying ownership and aligning strategy.

• Share price of Shriram Finance rose from INR 583 to INR 996 in 2025, reflecting market optimism about the capital injection.

Insurance and asset management transactions

• Sanlam is increasing stakes in Shriram General Insurance and Shriram Life Insurance, with regulatory approval expected soon.

• Acquisition of Piramal's 14.7% stake in Shriram Life will raise Sanlam's effective economic interest to about 68%.

• After completion, Sanlam will hold over 50% in each insurer, consolidating control and enabling operational excellence.

• Transactions are funded from discretionary capital, with a total outflow of ZAR 5.4 billion, and no outflow for the MUFG transaction.

Financial and operational impacts

• Short-term group earnings will see a small negative impact due to dilution, but long-term growth and profitability are expected to improve.

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

• 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.