Shriram Finance completes sale of housing finance arm to Warburg Pincus

The sale of Shriram Finance's stake in SHFL was executed through Warburg Pincus' affiliate, Mango Crest Investment Ltd

Shriram Finance, the flagship company of the Shriram Group, on Wednesday announced the successful completion of the sale of its entire stake of 84.44 per cent in its housing finance subsidiary Shriram Housing Finance Limited (SHFL) to Warburg Pincus, a leading global growth investor firm for a sale consideration of Rs 3,929 crore.  

 

The sale of Shriram Finance's stake in SHFL is done to Warburg Pincus’ affiliate --- Mango Crest Investment Ltd. The transaction marks a significant milestone, with all requisite approvals from regulatory authorities and stakeholders duly secured.

 

"We are pleased to announce the completion of this transaction and extend our heartfelt best wishes to the team as they embark on this new chapter under Warburg Pincus. We are confident that the team will continue to drive success through financial inclusion and affordable housing for individuals. We look forward to seeing it scale to greater heights under the stewardship of Warburg Pincus," said Umesh Revankar, executive vice-chairman, Shriram Finance.

 

It was in June that the board of Shriram Finance approved the sale of its housing-finance subsidiary to Warburg Pincus, to focus more on its core operations and secure growth capital. 

 

It has a pan-India presence with 155 branches and assets under management (AUM) of Rs 13,762 crore and a net worth of Rs 1,924 crore as of March 2024. 

 

JM Financial, Barclays, and Avendus acted as financial advisors to SFL, SHFL and Valiant. Trilegal and Anagram were legal advisors to Shriram Group and Valiant, while Cyril Amarchand Mangaldas advised Warburg Pincus on the transaction. 

 

The sale aligns with Shriram Finance’s strategic priorities, allowing the company to sharpen its focus on its core business segments and growth areas. This transition underscores Shriram Finance's commitment to creating value for its stakeholders while fostering long-term sustainability, it said. 

 

Shriram Housing Finance, a leading affordable housing finance company, has been an integral part of Shriram Finance’s growth story, contributing significantly to the financial inclusion through its focus on the housing needs of underserved segments.

 

With this transaction, SHFL is well-positioned to further expand its operations and accelerate its growth under Warburg Pincus’ ownership and guidance, it added.