SHRIRAM FINANCE AIMS TO SELL A 15% STAKE IN HOUSING ARM

According to sources cited by the news agency Reuters, Shriram Finance is seeking to sell a 15% stake in its housing finance subsidiary Shriram Housing Finance for a valuation of Rs 1,000 crores. Several private equity players, including BPEA EQT, have expressed interest in Shriram Housing Finance, which primarily provides mortgage loans for affordable housing, according to the story.

"We don't offer market speculative commentary. There is typically some debate about whether to use debt or equity. Nothing unusual, in our view," a Shriram Finance spokesperson said.

Shriram Finance owned 85% of Shriram Home Finance as of December 31, and San Francisco-based Valiant Capital Management owned the remaining 15%. According to the story, Shriram Finance's ownership stake in the housing financier will decrease from 85% to 70% following the equity infusion.

According to two senior people with absolute knowledge of the situation - Indian shadow lender Shriram Finance is aiming to sell up to 15% of the shares in its housing financial division for a total valuation of 10 billion rupees ($121.35 million). Many private equity firms, notably BPEA EQT, previously Baring PE Asia, have expressed interest in Shriram Housing Finance Ltd., which provides house loans, mostly in the affordable housing category. The first source added, on condition of anonymity, "The equity infusion will probably be to the tune of 10 billion rupees ($121.46 million)". After evaluating all the offers, the corporation might make a decision on the sale by the end of March, the source continued.

Shriram Capital, Shriram City Union Finance, and Shriram Transport Finance merged to establish Shriram Finance, one of India's largest non-banking lending companies, in November. Shriram Home Finance is a division of Shriram Finance. Both sources predicted that Shriram Finance's share in the housing segment would decrease from 85% to roughly 70% following the equity investment. Since the conversations were still private, the sources declined to be named. Shriram Finance owned 85% of Shriram Home Finance as of December 31, while Valiant Capital Management, L.P., with headquarters in San Francisco, owned the other 15%.

Private equity investors are shown a lot of interest, according to the second source. The insider further stated that the company is already in advanced discussions with two to three investors. Shriram Housing Finance's spokesman declined to comment, stating that the company does not address rumors. According to the first source, if the merger is approved, Shriram Housing Finance may have to postpone its intentions for a public listing by at least four to five years. If the equity sale goes through, the housing financier also intends to raise 40 billion rupees through debt during the upcoming fiscal year, which starts in April.

To conclude, Shriram Housing Finance managed 71.78 billion rupees in total assets at the end of the December quarter, with loan disbursements totaling more than 10 billion rupees.

About Shriram Finance

An Indian conglomerate with its main office in Chennai is called Shriram Group. On April 5, 1974, R. Thygarajan, AVS Raja, and T. Jayaraman created it. The organisation started out in the chit fund industry before branching out into lending and insurance.

The Group's flagship company, Shriram Finance, offers financial services such as retail lending, SME financing, commercial vehicle financing, and passenger vehicle financing (personal loans, gold loans, and two-wheeler loans). Shriram Transport Finance was created in 2022 as a consequence of the combination of Shriram City Union Finance and Shriram Capital.

Shriram is a pioneer in the NBFC industry and has a substantial rural footprint. As of December 31, 2022, Shriram Finance Ltd., one of the top NBFCs in the world, served 6.98 million private and commercial customers in India. Shriram offers a wide range of financial services for both individuals and businesses, including Fixed Deposits, Business Loans, Two-Wheeler Loans, and more.  The company aims to be the most popular financial services provider in the nation by providing a wonderful client experience while empowering its employees.