Piramal to buy 10% stake in TPG-backed Shriram Capital

"There are two options for Piramal to purchase a stake in the company," R. Thyagarajan, founder of the Shriram Group told The Economic Times. "He can buy from TPG Capital or we can issue fresh shares to him."

Thyagarajan added that Shriram has reached an in-principle agreement to sell the stake to Piramal.

According to sources, Shriram Capital is being valued at INR65 billion ($1.079 billion) in which case Piramal will have to pay around INR6.5 billion for the minority stake.

In May, Piramal purchased a 9.9% stake in Shriram Group's truck finance company, Shriram Transport Finance, from TPG for INR16.5 billion ($301.4 million).

The Piramal Group comprises of healthcare, drug discovery, pharmaceutical solutions and specialty glass packaging.

The investment in Shriram Capital will help Piramal expand its financial services businesses, which include a non-bank financing company (NBFC), Piramal Capital, for lending to real estate and education, a real estate focused private equity company - IndiaREIT - and a special vehicle for investments in infrastructure sector.

The deal will provide Piramal access to businesses spanning transport finance, consumer finance, asset management as well as life and general insurance.

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• Topics
• South Asia
• Financials
• India
• TPG Capital
• Financial Services