Piramal Enterprises to sell 8.34% stake in Shriram Fin - Economic Times

Mumbai: Piramal Enterprises plans to sell 8.34% stake in Shriram Finance for ₹4,630 crore, marking another significant deal in the financial services sector. Morgan Stanley India will act as the sole placement agent for this transaction. The floor price has been set at ₹1,483 per share, a 4.9% discount to the closing price of ₹1,559.85 on the National Stock Exchange Tuesday.

The sale of 3.12 crore shares by Piramal is scheduled for Wednesday, with the expected settlement date set for June 22, 2023, the term sheet shows.

A Piramal Finance spokesperson did not immediately respond to a request for comment.

In FY13, Piramal Enterprises sold its domestic pharmaceutical formulations business to Abbott Laboratories for ₹17,000 crore and had invested part of the proceeds in Shriram Group companies. Piramal invested ₹4,583 crore across three Shriram Group entities, according to a Crisil report. In May 2013, ₹1,636 crore was used to acquire a 9.9% equity stake in Shriram Transport Finance Co. Additionally, in April 2014, ₹2,014 crore was invested to obtain a 20% equity stake in Shriram Capital. Later, in June 2019, the investment in Shriram Transport Finance Corp was divested for ₹2,300 crore.

Following the merger between Shriram City Union and the demerged undertaking of Shriram Capital with Shriram Transport Finance (STFL) in 2022, STFL was renamed as Shriram Finance.

According to a Crisil report, Shriram Finance has emerged as the largest non-banking financial company in India and the fourth largest non-bank financier, encompassing housing finance companies as well with AUM of 193,730 crore (including SHFL) as on March 31, 2023. Commercial vehicle financing constitutes 50% of the book, followed by passenger vehicle financing at 18%, MSME financing at 10%, and other segments. According to a report by Crisil, as of September 30, 2022, the AUM of STFCL and SCUF stood at 135,249 crore and 36,117 crore, respectively.
However, asset quality has remained poor, with the gross stage 3 ratio of 6.2% as of March 31, 2023.After a period of slowdown, dealmaking in the finance sector is now gaining momentum, fueled by pent-up demand. UK-based Abrdn Investment sold its 10.2% shares in HDFC Asset Management. Last week, Bain Capital sold 0.75% in Axis Bank. Also last month, Abrdn made an exit from its joint venture by selling its 1.66% stake in HDFC Life Insurance. Also, Tencent Cloud Europe BV divested its stake in PB Fintech, the owner and operator of the Policybazaar and Paisabazaar platforms, through open market transactions.

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Piramal Enterprises to sell 8.34% stake in Shriram Fin - Economic Times
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