Plans for a stock sale in its subsidiary Shriram Housing Finance are revived by Shriram Finance

15 Dec 2023 , 09:18 AM

According to Moneycontrol report, Chennai-based top retail NBFC (non-banking financing firm) Shriram financing has started the process of selling a majority stake in the subsidiary and is re-examining its alternatives to unlock value in Shriram Housing Finance Ltd.

‘Earlier this year, attempts were made to sell a stake, and the deal was recently relaunched with a number of advisors.’ With potential suitors, which include corporations and private equity funds, preliminary talks have started. The current plan is to sell off the majority interest,’ one of the individuals told Moneycontrol .

Parent company Shriram Finance, which specialises in financing for commercial vehicles, controls 84.82% of Shriram Housing Finance, with San Francisco, California-based private equity firm Valiant Capital Management holding 14.94% of the company.

The private equity group BPEA EQT was reportedly in advanced talks to acquire a minority position in the home finance business in March, but the talks fell through.

‘All alternatives are available, subject to values. Plans are subject to change and possibly the sale of a minority stake if necessary. A second source informed Moneycontrol that Shriram Housing Finance is not a primary business for the parent company and needs funds to grow.

The combined sell side mandate for the proposed sale has been given to investment banks Avendus Capital, JM Financial, and Barclays, according to a third party who spoke with Moneycontrol.

‘Valiant Capital joined Shriram Housing Finance over ten years ago and has been a shareholder for a number of years. In the event of a 100% sale, they would be free to leave,’ a fourth source who was informed of the plans for the sale of the majority interest told Moneycontrol.

For feedback and suggestions, write to us at [e-mail]