Piramal Enterprises eyeing complete exit from Shriram Capital

Days after exiting commercial vehicle financier Shriram Transport Finance Company, Ajay Piramal-led diversified conglomerate Piramal Enterprises is now exploring the sale of its entire stake in Shriram Capital to raise growth capital for its financial services vertical.

In a disclosure to the stock exchanges on June 24, the firm said, “ As a part of the long term strategy of the company to fund growth of its financial services business, the company is evaluating the feasibility of sale of the entire (effective 20 percent) stake held by the company in Shriram Capital Limited.”

The proposed transaction would be subject to receipt of necessary approvals, including the approval of the company’s board of directors at the appropriate stage, it added.

Details on expected valuations, potential suitors and deal completion timeframe were not shared. Piramal Enterprises had picked up a 20 percent stake in Shriram Capital for Rs 2,014 crores in April 2014. Shriram Capital is the unlisted holding company for the financial service entities of the Chennai based Shriram Group. Piramal Enterprises also owns a 10 percent stake in Shriram City Union Finance.

A week earlier, Piramal Enterprises had announced the sale of its 9.96 percent stake in Shriram Transport Finance Company for Rs 2,300 crore to third-party investors on the floor of the stock exchange. In a statement, the firm said it had announced its intention to exit from its investments in Shriram Group in April. “ This divestment today is in line with our pre-stated intent and one of the steps of a broader strategy to leverage huge opportunities for strategic growth in our own financial services business,” it said.

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