Sanlam has acquired 3.7 percent direct stake in India’s Shriram Transport Finance Company (STFC) for R1 billion ($112 million), the financial services group said on Thursday.

Sanlam said the shares acquired in terms of this transaction would be held directly by Sanlam Emerging Markets (SEM), the cluster within Sanlam responsible for financial services in emerging markets outside of South Africa.

STFC is a commercial vehicle financing business, listed on both the Bombay and National Stock Exchanges in India, with a loan book of approximately R60 billion ($6.7 billion).

Sanlam’s existing exposure to STFC is via the group’s 26 percent holding in Shriram Capital Limited (SCL).

The transaction will take Sanlam’s effective holding in STFC to about 10 percent and is in line with its strategy to increase its holdings in existing partners where appropriate.

Heinie Werth, the CEO of SEM, said this transaction was yet another highlight and a significant step in Sanlam’s efforts to meet its strategic objectives to diversify both geographically and into broader financial services.

“The transaction will facilitate Sanlam’s further access to the strong growth and profit generating capacity of the financing entities within the Shriram Group and in the Indian market,” Werth said.

“It is an important and logical next step in strengthening Sanlam’s, and particularly SEM’s, relationship with Shriram. The strong relationship that we continue to enjoy is further entrenched in the long term benefit for both companies.”

Last year Sanlam concluded a further R2 billion ($225 million) investment in Shriram Capital Limited (SCL), the holding company for the financial services interests of the Shriram Group.

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