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Two persons with knowledge of the decision said Shriram Group, a non-banking financial conglomerate located in Chennai, had opted to withdraw from Shriram Properties. They said that it would give M Murali, the property company’s CEO, its stake.
Within the Shriram Group, there have been discussions over how to proceed with the separation from Shriram Properties. According to one of the insiders, the details of the exit, including the method and price, are still being worked out but may take place in about a month. Through its ownership in a joint holding company called Shriram Properties Holdings Private Ltd., Shriram Group has a 27.78 percent share in Shriram Properties, a residential real estate development company that specializes in mid-market and affordable housing categories. Murali and Shriram Group Executive Welfare Trust both possess 0.08 percent of the business, which is owned by 0.14 percent of shareholders.
The promoter holding in Shriram Properties will not materially change as a result of the Shriram Group’s exit because Murali is a member of the promoter group. Therefore, it won’t be necessary to make an open offer to shareholders. A spokeswoman for the Shriram Group declined to comment on Shriram Properties, which had no impact on the group’s financial services division, when approached.
The Shriram Group’s decision to leave is hardly shocking given that it has chosen to concentrate on the financial services industry. Following a thorough restructuring process, it has grown to become the nation’s largest retail NBFC (non-banking financing company). Shriram Finance had a total of Rs 177,498.17 crore in assets under management as of December 31, 2022. R Thyagarajan, the founder of Shriram Group, claims that the company just sold its secret shares of Rambal Ltd, a company that has been producing precise car parts since 1957.
An individual with knowledge of the situation stated that Shriram Properties would continue to utilize the Shriram name for a predetermined time. In 2000, the business launched in Bengaluru, and it has since grown to include operations in additional South Indian cities like Chennai, Coimbatore, and Visakhapatnam. Additionally, it is active in Kolkata, where a sizable mixed-use complex is being built. A total of 51 projects totaling 52.75 million square feet of anticipated saleable area were included in the company’s portfolio as of December 31, 2022. Of those projects, 23 were already in progress and 28 were planned.
The company’s revenue increased by 57 percent year over year to Rs 814 crore in FY23 as a result of two significant projects—Shriram Southern Crest in Bengaluru and a portion of Shriram Grand-1 in Kolkata—getting the go-ahead for revenue recognition after receiving completion certificates. In FY23, it had an EBITDA margin of 22% and a total of Rs 183 crore in earnings before interest, taxes, depreciation, and amortization. In comparison to FY22, when the company’s net profit was Rs 18 crore, it climbed to Rs 68.3 crore, representing a 3.8x gain. As of March 2023, the company has a gross debt balance of Rs 553 crore and a net debt balance of Rs 432 crore.
