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The Competition Commission of India approves the acquisition of joint control by Sanlam Emerging Markets (Mauritius) Limited along with Shriram Credit Company Limited over Shriram Asset Management Company Limited. The combination involves a preferential allotment of shares constituting 23 percent of the expanded voting share capital to Sanlam Emerging Markets (Mauritius) Limited and an open offer for 26 percent shareholding. The Commission concludes that the combination does not cause an appreciable adverse effect on competition in India because Sanlam Emerging Markets (Mauritius) Limited has no independent presence in the relevant markets.
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COMPETITION COMMISSION OF INDIA (Combination Registration No. C-2025/03/1255)
8th April 2025
Notice under Section 6(2) of the Competition Act, 2002 jointly given by Sanlam Emerging Markets (Mauritius) Limited and Shriram Credit Company Limited
CORAM:
Ms. Ravneet Kaur Chairperson
Mr. Anil Agrawal Member
Ms. Sweta Kakkad Member
Mr. Deepak Anurag Member
Order under Section 31(1) of the Competition Act, 2002
On 7th March 2025, the Competition Commission of India (Commission) received a Notice under Section 6(2) of the Competition Act, 2002 (Act) given by Sanlam Emerging Markets (Mauritius) Limited (SEMM) and Shriram Credit Company Limited (SCCL), [collectively, ‘Acquirers’] pursuant to execution of Binding Term sheet between SEMM and Shriram Asset Management Company Limited (SAMC) dated 10th December 2024 (Binding Term Sheet).
The Acquirers are existing shareholders of SAMC. While SCCL holds ~ 62 percent shareholding directly in SAMC and controls SAMC, SEMM holds an indirect shareholding of ~16 percent. The Proposed Combination involves acquisition of joint control by SEMM along with SCCL over SAMC in the manner detailed hereunder:
(a) Proposed Subscription by SEMM: Subscription by SEMM of equity shares of SAMC constituting 23 percent of the expanded voting share capital of SAMC by way of preferential allotment (Preferential Allotment); and
(b) Open Offer by SEMM and SCCL: The aforesaid proposed preferential allotment triggers open offer under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulation, 2011 and for the same SEMM along with SCCL have agreed to acquire 26 percent shareholding of SAMC from the public as required. As submitted, the shares tendered pursuant to the open offer will be acquired by SCCL alone (Open Offer).
As submitted, SAMC, being a listed company, is required to maintain at least 25 percent of its total shareholding as public shareholding on a continuous basis for listing. Accordingly, if, because of the acquisition of equity shares in the Open Offer, the public shareholding in SAMC falls below the minimum level required as per Rule 19A of the Securities Contracts and Regulation Act, 1956, SCCL will ensure compliance by diluting additional stake exceeding 75 percent within the prescribed time limit and in such a scenario, SCCL, SEMM and public shareholders would hold 52 percent, 23 percent and 25 percent shareholding of SAMC respectively.
In terms of Regulation 14 of the Competition Commission of India (Combinations) Regulations, 2024 (Combinations Regulations), vide letter dated 21st March 2025, certain information and clarifications were sought from the Acquirers. The response to this letter was submitted by the Acquirers on 27th March 2025 and was followed by certain additional information/clarifications made on 3rd April 2025.
SCCL is the subsidiary of Shriram Investment Holdings Private Limited (SIHPL) and is ultimately held by Shriram Group1 and by SEMM. SEMM, incorporated in Mauritius, is a part of Sanlam Group of South Africa. It is a strategic partner of Shriram Group and has investment in India in various Shriram Group entities.
SAMC, part of Shriram Group2, is engaged in asset management activity, and it manages Shriram Mutual Fund (SMF). As submitted, the company has received the license to start the Portfolio Management Business (PMS) from SEBI and yet to commence the business.
The Commission observed that two areas in which the Target has existing/potential presence are: (i) mutual funds; and (ii) PMS. The Commission noted the impact of the Proposed Combination is limited to change in control over SAMC from existing sole control of Shriram Group to joint control of Shriram Group and its existing strategic partner, SEMM/Sanlam Group. Considering the nature and effect of the Proposed Combination on management dynamics of SAMC itself, the same is not likely to cause any change in competition dynamics. This is more so considering that SEMM/Sanlam Group has no independent presence (other than through its investment in Shriram Group entities) in the areas of mutual funds/PMS or in activities which can be considered as vertical or complementary to mutual funds/PMS.
Considering the material on record, including the details provided in the Notice and the assessment of the Proposed Combination based on the factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Combination is not likely to have appreciable adverse effect on competition in India. Therefore, the Commission approves the Proposed Combination under Section 31(1) of the Act.
The order may be revoked if, at any time, the information provided by the Acquirers is found to be incorrect.
The Secretary is directed to communicate to the Acquirers accordingly.
1 As submitted, Shriram Capital Private Limited (SCPL) holds 63.88% in SIHPL and SIHPL holds 99.99% in SCCL. 2 SCCL is the promoter and sponsor of SAMC and holds 62.55% stake in SAMC.
