Shriram Transport speeds up as Piramal Enterprises acquires 10% stake

Shares of Shriram Transport Finance Company jumped 4.9% to Rs 770.10. Shares of Piramal Enterprises were up 0.59% at Rs 571.10.

Meanwhile, the S&P BSE Sensex was up 64.81 points or 0.33% at 20,003.85.

Shriram Transport Finance Company had outperformed the market over the past one month till 9 May 2013, jumping 10.18% compared with the Sensex's 9.4% rally. The scrip had, however, underperformed the market in past one quarter, falling 2.88% as against Sensex's 2.33% rise.

Piramal Enterprises (PEL) had underperformed the market over the past one month till 9 May 2013, sliding 0.6% compared with the Sensex's 9.4% rally. The scrip had, however, outperformed the market in past one quarter, gaining 3.45% as against Sensex's 2.33% rise.

PEL today, 10 May 2013, announced that it has acquired 2.28 crore shares of Shriram Transport Finance Company, representing about 10% stake in the company. The company paid Rs 723 per share with a total consideration of Rs 1652 crore for the acquisition of the share. The transaction was consummated/completed on the floor of the exchange, PEL said in a statement. PEL said that this investment is in line with Piramal's long term strategy for the financial services business.

Commenting on the transaction, Mr. Ajay Piramal, Chairman, PEL said, "Acquisition of this stake in Shriram Transport is in line with our strategy for building our presence in financial services sector and we see long term shareholder value creation from this stake acquisition. Shriram Transport is well known for their strong governance and business ethics, which resonates well with Piramal Group's business philosophy".

Piramal's financial services business includes an NBFC for lending to real estate and education services, a real estate focused private equity company -- IndiaREIT and a special vehicle for investments in infrastructure sector.

PEL reported consolidated net loss of Rs 200.41 crore in Q4 March 2013, higher than net loss of Rs 38.68 crore in Q4 March 2012. Total income jumped 24.7% to Rs 947.84 crore in Q4 March 2013 over Q4 March 2012.

PEL is one of India's largest diversified companies, with a presence in pharmaceutical, financial services and information management sectors.

Shriram Transport Finance Company's consolidated net profit rose 16.6% to Rs 383.46 crore on 21.1% growth in total income to Rs 1908.05 crore in Q4 March 2013 over Q4 March 2012.

Shriram Transport Finance Company is India's largest commercial vehicle finance company.

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