Financier Shriram Capital Ltd plans to merge two of its listed units, Shriram Transport Finance Co. Ltd and Shriram City Union Finance Ltd, with itself to create a simpler shareholding structure and help investors Piramal Enterprises Ltd and TPG Capital to easily sell their stakes in Shriram Group companies.
Kotak Mahindra Capital Co. Ltd has been hired to advise on the planned merger and shortlist buyers for Piramal and TPG’s stakes.
Ajay Piramal, chairman of Piramal Group, told media in an interview that the group’s planned exit from Shriram Capital was on track. Piramal bought a 20% stake in Shriram Capital for ₹2,014 crore in 2014. Piramal also holds 10% in Shriram City Union. Over the past few months, Piramal has been looking for a buyer for these stakes. Piramal had a 9.97% stake in Shriram Transport Finance, but in June sold this stake for ₹2,300 crore to several institutional investors.
“The value of the stake in Shriram being planned to be sold by Piramal is quoted at ₹4,500-5,000 crore for the prospective buyers, which in turn will value Shriram Capital at around ₹25,000 crore,” one of the people familiar with the development said on condition of anonymity.
If the deal goes through, the proceeds from the stake sale will be used by Piramal to infuse capital into its lending businesses, repay debts of Piramal Group’s promoter entities and provide capital for organic growth.
HrNxt.com Newsdesk has researchers and writers with an excellent domain knowledge about the talent ecosystem, and the business environment. The team keeps a tab on the latest happenings in the ecosystem to bring most relevant news and insights for our readers. You can connect with our newsdesk at newsdesk@hrnxt.com.