'No discord with TPG on Vishal Retail'

Putting an end to rumours of a possible break-up between the owners of Vishal Retail, the Rs 30,000-crore Shriram Group on Thursday said its partnership with US-based private equity (PE) company TPG Capital was doing well.

“There is no question of disagreement between Shriram Capital and TPG on Vishal Retail,” said Arun Duggal, chairman of Shriram Capital, on the sidelines of a seminar on PE investments trend in South India, organised by VC Circle.

There were reports that both partners were planning to break up following differences over infusing fresh capital into Vishal Retail. The reports stated Shriram had expressed its inability to bring in more money, which led both companies to explore an amicable split.

Duggal said the group never had a problem of raising funds. Apart from other financial institutions, 23 PE firms, including TPG, have so far invested in the group, according to him.

Shriram group companies have always been one of the favourites for TPG, according to company sources. TPG recently picked up a 15 per cent shareholding in Shriram Properties, the realty arm of Shriram Group, for Rs 450 crore. It also has a 15 per cent stake in Shriram Capital, 49 per cent stake in Shriram Retail Private Holdings and 28 per cent shareholding in Shriram Citi Union Finance.

TPG and Shriram Capital acquired Vishal Retail from its promoter Ram Chandra Agarwal for Rs 70 crore in March. The discount retail chain is under corporate debt restructuring process after it failed to service Rs 730-crore debt. “Vishal Retail is doing much better than expected. We thought it will take more than a year to bring back the business,” he said.

Shriram Capital is the holding company for the financial services and insurance entities of the Group. It is the main promoter of the group’s two listed companies, Shriram Transport Finance Company Ltd and Shriram City Union Finance Ltd.