Shriram Finance's long-term prospects intact as merger synergies play out

With one-off costs behind it, performance of NBFC should improve as merger synergies play out

Investors are reviewing the stock of Shriram Finance (SFL) after three major shareholders offloaded their stakes. Piramal Enterprises and TPG sold their entire holding, of 8.34 per cent and 2.65 per cent, respectively, for Rs. 4,824 crore and Rs. 1,390 crore, in that order. Another large investor has sold 3 per cent.

All three were stakeholders in Shriram Capital or Shriram City Union Finance (SCUF) prior to the merger of the three group companies.

Investors had been cautious about these potential sales and this reduces the fear of supply overhangs. Hence, the stock price rose sharply after the three big