Shriram Finance exits housing finance business and sells entire 85% stake to Warburg Pincus for Rs 4,630 crore


Mumbai: The largest auto-focused non-bank lender Shriram Finance has decided to exit the housing finance vertical and agreed to sell its entire 85 per cent stake to US private equity major Warburg Pincus for Rs 4,630 crore after 13 years. Is. operations.

The Chennai-based group, which was founded in 1974, had been in discussions with several potential bidders for the sale of Shriram Housing Finance for the past few months and was also in talks with UAE sovereign wealth fund Mubadala and other private equity major Bain . Capital and BPEA EQT, but negotiations did not proceed further.

Shriram Group, founded by industry veterans Ramamurthy Thiagarajan, AVS Raja and T Jayaraman in April 1974, has invested Rs 665 crore in the company so far and is exiting with huge profits.

“When things were going well we thought of an exit for better value-unlocking. The entire proceeds from the sale will go to Shriram Finance and will be used to raise our growth capital. Yes, we are exiting the sector completely with this sale and so is our long-term partner Valiant Capital, who has come on board since the inception of our operations in early 2011,” said Umesh, Executive Vice President, Shriram Finance. Revankar told. New Indian Express this evening.

Shriram Housing's loan book for the year ending March 2024 stood at Rs 13,762 crore and its net income was Rs 24,217 crore.

Revankar further said, the entire 3,000-plus employees along with management will remain with the new owners and Ravi Subramanian, who has been with the company since its inception, will continue to lead the firm under Warburg.

In a joint statement, Shriram Housing Finance and parent company Shriram Finance said Warburg Pincus through its associate Mango Crest Investments will acquire the entire stake from Shriram Group and external investor Valeant Capital Management and the transaction is subject to regulatory approval.

The statement said the transaction value of Rs 4,630 crore is for equity and convertible instruments of the company, which provides loans to buy or construct residential units and also provides loans against the property to be sold.

Parent company Shriram Finance, which is primarily into commercial vehicle financing, owns 84.82 per cent in the housing finance arm, while 14.94 per cent stake is held by San Francisco-based private equity player Valeant, which will completely exit the group and Warburg will fall apart. them up.

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