Shriram Group and TPG Capital, a leading global private equity investment firm, today announced a definitive agreement in which TPG will make an investment of up to $120 million (Rs 530 crore) to acquire a stake of up to 49 per cent in Shriram Retail Holdings Private Limited (SRHPL), the holding company of Shriram City Union Finance Limited (SCUFL).
The transaction will necessitate a public announcement of an open offer for shares of SCUFL in compliance with Sebi's Takeover Regulations. TPG will beneficially own up to 26.7% of SCUFL excluding shares that may be tendered in the open offer. The investment is subject to approval of the FIPB and other regulatory agencies.
This is TPG's second investment in the Shriram Group. In February 2006, the firm, then known as Newbridge Capital, invested approximately $100 million into Shriram Holdings (Madras) Private Limited, taking a stake in its subsidiary Shriram Transport Finance Company Limited.
R Thyagarajan, chairman of Shriram Group, said "TPG has been a partner with Shriram Group in its Commercial Vehicle Financing business since 2006 and their involvement has had a positive impact in the growth of the business. Their involvement in the consumer finance business of the group, which will also significantly strengthen this business."
Puneet Bhatia, who headed the transaction for TPG, said, "Shriram City Union Finance has a unique franchise and possesses the formidable Shriram group culture of inclusive growth and value creation, and is well-positioned to ride the attractive macro opportunity to emerge as a leader in the retail finance landscape in India."
TPG was advised by DSP Merrill Lynch Limited and J. Sagar Associates and the Shriram Group was advised by Kanga & Co.
Shriram City Union Finance Limited is the consumer finance arm of the Shriram Group with a focus on consumer durable, two-wheeler, personal and enterprise financing across India. The Company began operations in 1986 as a deposit-taking NBFC engaged exclusively in truck financing until 2002,
