American fund Warburg will buy Shriram Housing Finance

Mumbai: US private equity major Warburg Pincus is ready for acquisition Shriram Housing Finance At Rs 4,630 crore – the largest acquisition Home Loan Company by PE Fund in India. This is also New York-based Warburg's biggest investment deal in the country so far.
Shriram Finance Housing Finance owns a controlling stake in the company, while Mauritius-based PE firm Valeant Partners holds the remaining stake. As part of this transaction, Valeant will sell its equity stake entirely to Warburg.
Despite the change in ownership, the current management team Shriram Housing Finance- led by MD & CEO Ravi Subramanian – Will continue to lead the business. However, the name of the company will be changed after the completion of the transaction.
Shriram Housing reported revenue of Rs 1,429 crore for FY24 and its net worth for the same period stood at Rs 1,923 crore. Shriram Finance will receive a minimum of Rs 3,909 crore along with some additional amounts depending on the identified events.
Will buy through Warburg Mango Crest Investments, Mauritius-incorporated entity that carries out investment activities. “We expect to complete the transaction within 200 days. The sale will give rise to net worth and yield profit after tax of Rs 1,360 crore to SFL,” he said. Umesh Revankar, Executive Chairman, Shriram Finance. “SFL is a growing business and will require capital. The sale will improve the capital adequacy ratio by one per cent,” he said. He said that there are some commercial relationships between Shriram Finance and Shriram Housing Finance which will continue.

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“Our focus will be on lending to businesses to buy vehicles or any business by mortgaging property, which is the core of the company…this will remain the core,” Revankar said.
Shriram Housing Finance has 155 branches across the country and assets under management worth Rs 13,762 crore. Revankar said there are certain commercial businesses that are carried out on an arm's length basis with SFL, and which will continue even after the merger.
In 2019, Blackstone had bought 97.7% stake in Aadhar Housing Finance for about Rs 2,200 crore. Blackstone recently partially exited Aadhaar Housing through an IPO.

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