TPG sells stake in Shriram Finance for Rs 1,400 cr, Piramal to follow suit

Shriram Finance last year became India's largest non-bank lender after merger of units

American private equity major TPG has sold its entire 2.65 per cent stake in Shriram Finance (erstwhile Shriram Transport Finance Company) via block deals on Monday, informed investment banking sources. TPG has received Rs. 1,400 crore (($170.9 million; $1 = Rs. 81.91) by selling 9.9 million shares, said a source.

Over 136,000 shares changed hands in three block deals, as of 3.09 pm, in the price range of Rs. 1,471.2 to Rs. 1,476 at a 5-5.3 per cent premium to Friday’s close, according to Refinitiv data. The shares were sold to several mutual funds and insurance companies.

The company had a market capitalisation of Rs. 55,086 crore as of Monday. 

The day-to-day operations of Shriram Finance are led by Umesh Revankar, who has been with Shriram Group for more than 35 years. 

TPG continues to hold a stake in Shriram Group’s insurance venture, Revankar told this paper in an interview.

Besides TPG, Piramal Group is also expected to sell its 8.3 per cent stake in the company shortly. 

Shriram Finance became India’s largest non-banking finance company last year following the merger of Shriram Transport Finance Company and Shriram City Union Finance, which used to fund small businesses and homes. 

With the merger, Shriram Finance became a diversified player, with a total networth of Rs. 36,156 crore and assets under management of Rs. 1.71 trillion as on September 30, 2022. The company is focused on driving the self-employed and the micro, small, and medium enterprise economy.

Both TPG and Piramal had invested in Shriram’s other entities and acquired a stake in Shriram Finance after the merger. The Chennai-headquartered promoters currently own a 25.1 per cent stake in the company, while Piramal Group owns an 8.3 per cent stake, according to the National Stock Exchange data. 

Shares of Shriram Finance hit the upper circuit on Monday. The shares closed nearly 5 per cent higher at Rs. 1,469.85.

ICICI Securities was the investment bank that handled the share sale.