 "Piramal acquires 10% stake in Shriram City for Rs 790 cr")
The Mumbai-based firm has acquired 65,79,840 equity shares of Shriram City Union Finance Ltd, the retail focused non-banking financial company (NBFC) of the Shriram Group, Piramal Enterprises said in a statement today.
The acquisition, by way of a preferential allotment of shares by Shriram City Union, was at a price of Rs 1,200 per equity share, taking the total capital paid at Rs 790 crore, it added.
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"We are happy that the shareholders of Shriram City Union Finance have approved our investment in the company. This capital infusion will support its present business model and help further its growth plans over the next few years," Piramal Enterprises Ltd Ajay Piramal said.
Shriram has a good team and the company is confident about creating long-term value for shareholders of both the companies, he added.
In April, Ajay Piramal-led Piramal Enterprises had announced that it proposed to acquire 9.99% stake in NBFC firm Shriram City Union Finance for about Rs 790 crore.
Shriram City Union Finance is a deposit-accepting non-banking financial company (NBFC) specialising in retail finance.
With assets under management of Rs 15,800 crore, the company offers multiple loan products to small business owners and for acquiring assets such as two wheelers, commercial vehicles, passenger vehicles, consumer durables and homes.
Shriram City Union Finance is a part of Shriram Capital in which Piramal Enterprises has acquired a 20% stake for a total consideration of Rs 2,014 crore.
In May 2013, Piramal had also invested Rs 1,636 crore to acquire 9.9% equity in Shriram Transport Finance Company Ltd, one of the listed NBFCs forming part of the Shriram Group.
Ajay Piramal, who sold his pharmaceuticals business to Abbott Laboratories for $3.8 billion in 2010, is seeking to expand beyond providing funding for infrastructure and property projects. Financial services was Piramal Enterprises' fastest-growing business last year, a company presentation on its website shows.
In April, the company sold its 11% stake in Indian mobile-phone unit to Vodafone Group Plc's local subsidiary for Rs 8,900 crore.
Piramal Enterprises shares were trading at Rs 704.20 apiece on the BSE in late afternoon trade, up 0.34% from its previous close.