Shriram Housing Finance | Business Upturn

Shriram Finance approves sale of entire stake in Shriram Housing Finance to Warbug Pincus

Markets Desk — Thu, 22 Aug 2024 11:13:40 +0000

Shriram Finance today has approved the sale of its entire stake in Shriram Housing Finance Limited (SHFL) to Mango Crest Investment Ltd, an affiliate of global private equity firm Warburg Pincus. The transaction, which has been approved by the Competition Commission of India (CCI), will see Warburg Pincus potentially acquiring up to 99.91% of SHFL’s share capital.

The approval follows a Board meeting held on May 13, 2024, where Shriram Finance’s directors considered and sanctioned the divestment of SHFL, a high-value debt-listed non-material subsidiary of the company. The sale is subject to customary conditions, including regulatory approvals and adherence to the terms set out in the share purchase agreement.

The CCI granted its approval for the acquisition on August 20, 2024, under Section 31(1) of the Competition Act, 2002. Shriram Finance is awaiting further regulatory clearances and will provide updates as the transaction progresses.

CCI approves Warburg Pincus’ ₹4,630 crore acquisition of Shriram Housing Finance

News Desk — Tue, 20 Aug 2024 16:39:09 +0000

The Competition Commission of India (CCI) has approved Warburg Pincus’ ₹4,630 crore acquisition of Shriram Housing Finance. Mango Crest Investment Ltd, a Warburg Pincus affiliate, will acquire shareholding in Shriram Housing Finance Ltd.

Key Points

Shriram Finance is divesting its housing finance arm to focus on vehicle finance and small business lending.
Warburg Pincus commits an additional ₹1,000 crore investment post-deal closure.
The transaction, announced in May 2023, is expected to conclude by March 2025.

Companies Involved

Buyer: Mango Crest Investment Ltd (Warburg Pincus affiliate)
Target: Shriram Housing Finance Ltd (registered with National Housing Bank)
Seller: Shriram Finance (NBFC serving 84 lakh customers)

Market Impact

This acquisition signifies a major shift in India’s financial services sector, potentially altering the housing finance landscape. It also highlights global private equity firms’ ongoing interest in India’s financial market.

Shriram Finance shares surge 5% to become the top Nifty gainer as company announces sale of housing finance arm

Markets Desk — Tue, 14 May 2024 04:10:29 +0000

Shriram Finance shares surge 5% in trade and are the top gainers on the Nifty after the company’s announcement to sell its housing finance arm to Warbug Pincus. Shriram Finance share price hit an intraday high of Rs 2,417 in the morning trade. As of 9:40 AM, shares of Shriram Finance were up 2.57% at Rs 2,360 on the NSE.

The proposed transaction is valued at Rs 4,630 crores for equity and convertible instruments of SHFL. The transaction is subject to regulatory approvals. SFL holds a controlling stake in SHFL while private equity firm Valiant Partners L.P. (Valiant), Mauritius, holds the remaining ownership. As a part of this transaction, Valiant will also completely divest its equity stake to Warburg Pincus.

SFL is one of the India’s leading NBFCs, serving over 84 lakh customers across India offering commercial vehicle loans, two-wheeler loans, and MSME financing. SHFL – one of India’s leading players in the affordable housing segment, has built a strong growth trajectory, playing a transformational role in the Indian housing financing industry. The company has been reporting a robust AUM growth rate of 56% CAGR over the last 4-year period.

Shriram Finance to sell housing arm to Warbug Pincus for Rs 4,630 crore

Markets Desk — Mon, 13 May 2024 13:55:28 +0000

Shriram Finance Limited (SFL), in its board meeting held earlier today approved the sale of its housing finance subsidiary Shriram Housing Finance Limited (SHFL) to Warburg Pincus, a leading global growth investor. Warburg Pincus will acquire the stake through its affiliate Mango Crest Investment Ltd from all the sellers. The proposed transaction is valued at Rs 4,630 crores for equity and convertible instruments of SHFL. The transaction is subject to regulatory approvals. SFL holds a controlling stake in SHFL while private equity firm Valiant Partners L.P. (Valiant), Mauritius, holds the remaining ownership. As a part of this transaction, Valiant will also completely divest its equity stake to Warburg Pincus.

This transaction marks a significant strategic milestone in the journey of Shriram Housing Finance underscoring the exceptional value it has created. Following the conclusion of this transaction, Shriram Housing Finance Limited will operate as a standalone entity, continuing to enhance value for its stakeholders as it preserves its heritage and mission to provide housing finance solutions to the under-served population of the country.

The existing management team of SHFL led by Mr. Ravi Subramanian, Managing Director and Chief Executive Officer, will continue to lead the business.

Umesh Revankar, Executive Vice-Chairman, Shriram Finance Ltd. commented “Over the years, SHFL has built a differentiated business and a strong brand, providing accessible and innovative financial solutions to meet diverse customer needs across the Indian housing finance landscape. The Company has been reporting industry leading CAGR while building superior asset quality. With the rapid growth in the consumer finance sector, both SFL and SHFL foresee tremendous opportunities in their respective operating segments. We believe that at this cusp of growth, Shriram Housing Finance is set to unlock greater value as it empowers underserved millions to own homes. This transaction aims to maximize value creation for both SFL and SHFL, as both companies independently fulfill their respective long-term vision. We welcome Warburg Pincus and look forward as SHFL continues to build on its legacy and embrace its next phase of growth.”