Mumbai: The promoter entity of the Shriram Group is seeking to raise ₹2,000-2,400 crore in debt to fund the planned purchase of Piramal Enterprises’ stake in Shriram Investment Holdings and other group businesses, said people aware of the plan.
Shriram Ownership Trust has hired investment banks including Barclays to raise the funds, they said. Shriram Ownership Trust holds stakes in group companies through Shriram Capital Pvt Ltd.
Piramal Enterprises in January announced that it would sell its entire stake in Shriram Investment Holdings to Shriram Ownership Trust for ₹1,440 crore by March 31. Piramal Enterprises has a 20% stake in Shriram Investment Holdings.
“The Shriram Group is looking to raise ₹2,000 crore to ₹2,400 crore in debt to buy Piramal’s stake,” said one of the people. “The contours of the debt including pricing and tenor are being finalised. The funding is more like loans against Shriram Finance Ltd’s shares.”
A Shriram Group spokesperson declined to comment while a Barclays spokesperson did not respond to a request for comment.
Piramal Monetising Non-core Assets
While announcing the deal to sell the stake in Shriram Investment Holdings, billionaire Ajay Piramal’s Piramal Enterprises had said the move was aligned with its focus on monetising non-core assets. “The contribution of SIHPL (Shriram Investment Holdings) in the revenue of the company for the year ended March 31, 2023 was Nil,” Piramal Enterprises had said. “The proceeds from the transaction will further strengthen our balance sheet.”
In June last year, Piramal Enterprises sold its entire 8.3% stake in Shriram Finance, the non-bank finance company of the group, through multiple block deals in the open market for Rs 4,824 crore. It is now set to fully exit the Shriram Group.
Piramal Enterprises made its investments in the Shriram Group after selling its pharmaceutical business 2012-13. It invested Rs 4,583 crore across three Shriram entities.
In 2019, it sold the stake in Shriram Transport Finance for Rs 2,300 crore. In 2022, Shriram City Union Finance Ltd, Shriram Transport Finance Ltd and Shriram Capital Ltd had merged.
Chennai-based Shriram Group has two insurance joint ventures: One in life and the other in general insurance. Shriram Capital holds around 70% of these businesses, while Sanlam of South Africa owns 30%.
The Shriram Group is evaluating options to sell its housing finance subsidiary. Bain Capital, CVC Capital and Advent International are in the fray to buy Shriram Housing Finance, as reported by ET on February 15.
