Piramal, TPG exploring exit from Shriram Capital

Piramal

Mumbai: Ajay Piramal-led Piramal Enterprises Ltd (PEL) and American private equity firm TPG Capital are exploring an exit from Shriram Capital Ltd, the holding company of the Shriram group, the group said in a stock exchange filing on Tuesday.

The Shriram Group includes listed entities Shriram Transport Finance Co Ltd, Shriram City Union Finance Ltd, Shriram Asset Management Co Ltd, Shriram EPC Ltd, as well as unlisted entities such as its insurance businesses. The group has an overall customer base of around 19 million, over 75,000 employees across 3,800 branches, with assets under management (AUMs) in excess of ?1,50,000 crore

“Both PEL and TPG are evaluating the feasibility of selling their respective shareholding in Shriram Capital,” the group said in the filing.

It added that Piramal Enterprises’ evaluation of exit from Shriram Capital is part of the former’s long-term strategy to fund growth of its financial services business, while TPG’s evaluation of an exit is consistent with its investment review practices, and takes into account, among other factors, the period of time TPG has been invested in Shriram Capital.

“If and when definitive documents for such a transaction are executed, appropriate disclosures will be made in accordance with applicable laws,” the group added.

With the proposed exit of Piramal and TPG, the group will be governed and managed by the Shriram Ownership Trust, said D.V. Ravi, managing director, Shriram Capital & Managing Trustee, in the statement.

“Leadership, vision and direction to the Shriram Group Companies will be provided by the Trust, mainly through the respective SGCs Boards. SOT will continue to actively engage with San lam, who are also our Partners in SCl and the two Insurance Businesses with stakes of 26% and 23%, respectively, and other stakeholders to drive the businesses forward,” he said.

Shriram Capital will evaluate various restructuring initiatives such as rationalization of holding structure, including consolidation, restructuring combinations between the various entities in the Shriram Group, he added.

Last week, Piramal sold its entire 10% stake in commercial vehicle financier Shriram Transport Finance Co Ltd, Mint reported. The stake sale fetched Piramal approximately ?2,300 crore.

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