Shriram Group to raise $200 mn for non-financial sector biz

A mandate had been announced for a boutique advisory firm to raise the amount

Chennai-based Shriram Group is preparing a road map to raise about $200 million through the private equity (PE) route to seed emerging businesses in the non-financial segment.

Recently, the group formed Shriram Entrepreneurial Ventures, a holding company for 10 non-financial services businesses such as Shriram EPC, Shriram Properties, Take Solutions (the technology arm), medical diagnostics, musical instruments and automobile components. Cumulatively, these segments contribute revenues of about Rs6,000 crore to Shriram Group’s total revenue of Rs60,000 crore.

Senior Shriram Group officials told Business Standard Shriram Entrepreneurial Ventures was being readied to raise funds. However, they declined to specify the sum.

NON-FINANCIAL SERVICES FIRMS OF SHRIRAM GROUP

• Information Technology: Take Solutions
   
• Real estate: Shriram Properties
   
• Automobile components: Rambal
   
• PET & flexible packaging: Victory Laminations
   
• Drugs & pharmaceuticals: Medispan
   
• Medical diagnostics: Neugen Diagnostics
   
• Musical instruments: Harmony Musical
   
• Business process management: Shriram Value
   
• Infrastructure & power: Shriram Infrastructure & Power
   
• Engineering services: Shriram EPC

Two investment bankers in the know said a mandate had been announced for a boutique advisory firm to raise $200 million.

Earlier, the group had formed a holding company for the financial services business as well; global PE entity TPG is expected to have a minority stake in that company. Shriram Group has a well-established business in various financial services — from financing trucks and life and general insurance to chit funds and consumer and enterprise finance. The group is aggressively expanding this business and preparing for a banking licence, as and when there is an opportunity for entrants in India.

Shriram Group has relied heavily on the private equity route, with 23 PE investing $800 million since 2005.

Marquee PE investors which have invested in Shriram Group include ChrysCapital, ICICI Venture, Bessemer Ventures, Norwest Partners and Merrill Lynch.