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A day after American private equity major TPG sold its stake in Shriram Finance, Piramal Enterprises is planning to sell its entire 8.34 per cent stake in the company via block deals on Wednesday.
About 31 million shares worth Rs 4,832 crore have been offered by the company to institutional investors, per a term sheet.
On Tuesday, Shriram Finance closed at Rs 1,559 per share, and the deal floor price was fixed at Rs 1,483 per share — a discount of 5 per from Tuesday’s closing.
The shares of Piramal Enterprises were up 6 per cent to Rs 838 per share.
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After the restructuring of Shriram Group, Piramal Enterprises received shares in multiple Shriram Group companies, including 8.34 per cent in BSE-listed Shriram Finance and a 20 per cent stake in each of the three holding companies: Shriram Gi Holdings, Shriram Li Holdings, and Shriram Investment Holdings.
With this, Piramal owns a 13.33 per cent stake in Shriram General Insurance Company and 14.91 per cent in Shriram Life Insurance Company.
On Monday, TPG sold its entire 2.65 per cent stake in Shriram Finance (erstwhile Shriram Transport Finance Company) via block deals to a clutch of mutual funds and other institutional investors.
Piramal had acquired a 10 per cent stake in Shriram Transport Finance in 2013 for Rs 1,636 crore and a year later acquired a 20 per cent stake in Shriram Capital for Rs 2014 crore and a 10 per cent stake in Shriram City Union Finance for Rs 790 crore in the same year.
In 2017, Shriram Group tried a merger between Shriram Capital and IDFC Bank, but the deal did not go through. Piramal Group then decided to hold on to the stake and was looking for opportunities to exit. In 2021, the company later acquired the bankrupt firm Dewan Housing Finance Corporation by paying Rs 14,700 crore in cash to lenders.
In its annual report for 2023, Piramal said it has started the process to identify potential buyers for its associate investments: Shriram Li Holdings, Shriram Gi Holdings, and Shriram Investment Holdings.
“The company anticipates completion of sale in the foreseeable future, and accordingly, investments amounting to Rs 2,277.54 crore in respect of these associates have been reclassified under ‘assets held for sale’,” it said.
The Chennai-headquartered promoters currently own a 25.1 per cent stake in Shriram Finance, while Piramal Group owns an 8.3 per cent stake, according to National Stock Exchange data. The group has listed its pharmaceutical business separately after hiving it from the parent company.
