Shriram GI Holdings Private Limited

Page 1 of 4 COMPETITION COMMISSION OF INDIA (Combination Registration No. C-2023/11/1076) 16th January 2024 Notice under Section 6(2) of the Competition Act, 2002 jointly given by Shriram GI Holdings Private Limited and Shriram General Insurance Company Limited CORAM: Mr. Anil Agrawal Member Ms. Sweta Kakkad Member Mr. Deepak Anurag Member Order under Section 31(1) of the Competition Act, 2002 1. On 8th November 2023, the Competition Commission of India (‘Commission’) received a Notice under Section 6(2) of the Competition Act, 2002 (‘Act’) given by Shriram GI Holdings Private Limited (‘SGIH’). The Notice was filed pursuant to the approval of the board of directors of SGIH and Shriram General Insurance Company Limited (‘SGIC’) (collectively, “Parties”) of the Scheme of Amalgamation (‘Scheme’) which envisages amalgamation of SGIH with SGIC (‘Proposed Combination’). During the course of review, the Parties, considering that the Proposed Combination envisaged amalgamation of SGIH with SGIC, furnished requisite documents for SGIC to also be considered as a joint notifying party along with SGIH. The Scheme was approved by the Board of Directors of SGIC and SGIH respectively on 9th August 2023 and 10th August 2023. Pursuant to the Proposed Combination, SGIH will be amalgamated with SGIC and SGIC shall continue to function under the name and style of SGIC carrying on the business of general insurance, as carried on by it prior to the Scheme. Combination Registration No. C-2023/11/1076 Page 2 of 4 2. In terms of Regulations 14(3) of the Competition Commission of India (Procedure in Regard to the Transaction of Business related to Combinations) Regulations, 2011 (‘Combination Regulations’), the Commission, vide letter dated 24th November 2023 (‘RFI’), sought certain information and clarifications regarding, inter alia, shareholding/control of SGIH/SGIC, presence of their affiliates etc. The Parties submitted part response on 20th December 2023 and complete response on 29th December 2023 after seeking extension of time (‘Response to RFI’). The Parties also made certain additional submissions on 4th January 2024. 3. SGIH and SGIC are both part of the ‘Shriram Group’ of companies, which is, inter alia, engaged in four different lines of businesses/verticals namely: (i) Financial Lending (ii) General Insurance (iii) Life Insurance and (iv) Financial Services. Shriram Capital Private Limited (‘SCPL’) is the overarching holding arm of the financial services entities of the Group. The shareholders of SCPL, include, inter alia, Shriram Ownership Trust (‘SOT’), Shriwell Trust and Sanlam Emerging Market (Mauritius) Limited (‘SEMM’). The details of shareholding and activities of each of the Parties are as under: i. SGIH is held, inter alia, by SCPL, SOT, Piramal Enterprises Limited (‘PEL’) and TPG India Investments II Inc., Mauritius (‘TPG’). SGIH is an unregistered Core investment Company with the main objective of undertaking investment business. ii. SGIC is held, inter alia, by SGIH, SEMM and Tangent Asia Holdings II Pte. Ltd., Singapore (‘KKR Group’/ ‘Tangent’). SGIC is a general insurance company, registered with IRDAI and engaged in the business of providing general insurance, undertake re-insurance, counter insurance of insurances and to carry on generally every kind of non-life insurance and re-insurance business relating to general insurance. 4. Based on the aforesaid, it is observed that apart from the Shriram Group entities, the other (direct/indirect) significant shareholders of the Parties include SEMM, PEL, TPG and Tangent. The Commission observed that the Proposed Combination is primarily an intra- Combination Registration No. C-2023/11/1076 Page 3 of 4 group restructuring involving the entities forming part of the Shriram Group. As regards the presence of other significant shareholders, the Scheme envisages issue of shares of SGIC to the shareholders of SGIH in the proportion to their respective holdings in SGIH. Further, as submitted, the Proposed Combination does not envisage a change in rights of any of the shareholders at least at this stage. Accordingly, in absence of any significant change in the control over the Parties/businesses, the Proposed Combination is not likely to cause any significant change in competition dynamics. 5. The Commission observed that the Proposed Combination is not likely to cause any change in competition dynamics even in terms of market assessment considering the presence of the significant shareholders in related markets as the same is insignificant to cause any change in competition dynamics as detailed in the ensuing paragraphs. 6. As submitted, PEL, SEMM and Tangent has no direct/indirect shareholding in any business activity which can be considered as linked to the activities of SGIC in horizontal, vertical, or complementary aspects. TPG’s certain affiliates are engaged in the activity of distribution of insurance products which can be considered as a vertical linkage (‘TPG Affiliates’). 7. Accordingly, the Commission assessed the Proposed Combination in terms of vertical linkages within the value chain of insurance products in form of activities of general insurance and that of distribution of insurance products. However, for the reasons given in ensuing paragraphs, the Proposed Combination is not likely to result in any appreciable adverse effect on competition in any of the plausible markets that could be delineated, and accordingly, the question of the exact delineation of relevant market(s) for assessment of aforesaid vertical linkages is left open. 8. The market share of SGIC in the general insurance segment is less than one (1) percent and the combined market share of TPG Affiliates in the segments of distribution of insurance products or narrower segment of distribution of general insurance products is estimated to be less than one (1) percent and around three (3) percent respectively. Combination Registration No. C-2023/11/1076 Page 4 of 4 Accordingly, it is observed that the presence of the Parties in the value chain of general insurance products is insignificant to cause any change in competition dynamics. 9. 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 any appreciable adverse effect on competition in India. Therefore, the Commission approves the Proposed Combination under Section 31(1) of the Act. 10. The order may be revoked if, at any time, the information provided by the Parties is found to be incorrect. 11. The Secretary is directed to communicate to the Parties accordingly.