TPG dilutes stake in Shriram Transport for $300 mn

TPG Capital, a US-based private equity firm has diluted its stake in Shriram Transport Finance Ltd (STFL), for $300 million. The shares sold by TPG through a bulk deal were picked up by Centaura Investments, Sanlam Life and Swiss Finance. The trade price of the shares sold is around six times higher than what they were bought at. STFL is a part of the Rs 60,000-crore Shriram Group.

According to data with National Stock Exchange, Newbridge Investments II Ltd has sold 22.65 million shares at Rs 715.15 a share. According to Bombay Stock Exchange (BSE) data, as on December 31, the fund was holding 45.99 million (which is 20 per cent of the total shares in the company). The stock price plunged as much as 7.72 per cent to Rs 699.25 on Thursday on the BSE.

In 2005, TPG’s Newbridge Fund invested $100 million and eventually held around 49 per cent in Shriram Holding (Madras) Pvt Ltd in which the Shriram Group holds the remaining 51 per cent. This holding entity had 45 per cent stake, at one point, in the listed STFL, which currently has a market capitalisation of Rs 15,862 crore.

A senior official from the Group said the PE fund came on board by buying shares for Rs 110-120 a share and they made a good return. TPG has been planning to exit STFL since 2011 and both firms have started procedures to make sales easier, through a merger of the promoter group shares in one platform. Following the plan, STFC’s board of directors approved the scheme of arrangement for amalgamation of Shriram Holdings (Madras), which held shares of STFC, with the company.