Piramal to buy 20% stake in Shriram Capital for Rs 2,014 crore

Piramal Enterprises today said it will acquire 20% stake in financial services company Shriram Capital for Rs 2,014 crore.

Unlisted Shriram Capital is the holding company for as many as five businesses, including Shriram Transport Finance Company, where Piramal Enterprises already owns a 10% stake. Piramal had bought the stake from private equity company TPG in May last year.

Piramal's latest investment is in the holding company, which has interests in Shriram Life Insurance and General Insurance, retail broking, an asset management company and Shriram City Union, which gives secured and unsecured home and personal loans. The three listed businesses - transport finance, asset management company and City Union - have a combined market capitalisation of Rs 23,601 crore.

The Shriram stake purchase will add muscle to Piramal's financial services businesses.

Ajay Piramal, chairman, Piramal Enterprises Limited said, "This investment builds our presence in financial services sector and we see long term shareholder value creation from our partnership with Shriram Capital."

R Thyagarajan, founder, Shriram Group said, "Piramal's entry into Shriram Capital is a significant milestone for the financial services business to take a quantum leap in the group's contribution to the community at large."