South African financial services group Sanlam finalised a R2-billion investment in Indian group Shriram Capital Limited, acquiring a 26% stake in the business, the company announced on Tuesday.
The investment was first announced in September 2011 and was undertaken by Sanlam Emerging Markets (SEM), the division responsible for financial services in emerging markets outside South Africa.
The most recent acquisition grows Sanlam's portfolio of businesses in the rest of Africa and Asia and supports the company's "target of sustainable value creation in these growth markets", it said.
Sanlam's focus remains on India and the rest of Africa, chief executive officer Johan van Zyl said at the release of the organisation's interim results for six months in September.
"Strategically, Sanlam previously into insurance joint ventures with the Shriram Group to participate in and benefit from the growing financial services industry in India," chief executive officer of SEM, Heinie Werth, said in a statement.
The two groups began their partnership in life insurance in 2005 and short-term insurance in 2008.
"[It] is an important and logical next stop for SEM in our relationship with Shriram as it will provide us with access to Shriram Capital Limited's wider financial services exposure in India and will see SEM diversifying its earning base."
Werth said that despite current challenges in the Indian economic environment, he remained confident of long-term potential.
"Sanlam's partnership with us has been catapulted to the next level with this investment," said executive director of the Shriram Group, Gopalasamudram Sundararajan.
The Shriram Group has interests in various sectors, ranging from financial services to manufacturing and pharmaceuticals.