TPG’s Shriram Transport stake said to attract interest from Orix
Japanese financial services group Orix Corp. is the latest player to have reportedly set its sites on TPG’s share in Shriram Transport Finance Co. (STFC), touted as India’s largest commercial vehicle lender, in a sale that could bring in more than INR30 billion ($668 million).
According to India's Economic Times, Orix Corp., which currently owns just over 23% of IL&FS, is considering taking TPG's 20% stake in Shriram as part of its strategy to ramp up its overseas footprint. India has been a favored destination for Japanese companies looking to leverage their potential beyond their own borders. Case in point, Mizuho Financial Group in February aligned itself with India's Tata Group to invest in the latter's portfolio companies, and one month later, Reliance Life Insurance announced it would sell a 26% stake to Japan's largest life insurer, Nippon Life Insurance, for $680 million. Also in March, financial giant Nomura Securities announced a $500 million India infrastructure fund, raised with capital committed by Japanese investors.
Reports surfaced in March that TPG, which has an estimated 20%, indirect stake in Shriram Transport, sought to sell its holdings for as much as $1 billion, translating to 8x return on its initial investment. Last month, Singaporean sovereign wealth fund Temasek Holdings reportedly entered into negotiations with TPG to purchase the stake.
Credit Suisse is said to be managing the sale.
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