TPG sells Shriram City Union Finance stake to Apax
TPG Capital has sold its 20.37% stake in Indian non-banking finance company Shriram City Union Finance (SCUF) to Apax Partners. Based on the May 12 closing price of INR1,719, it was worth around INR23 billion ($360 million).
Regulatory filings indicated that TPG sold 13.4 million shares in SCUF to Apax-owned Dynasty Acquisition. SCUF's shares gained nearly 4.5% on May 13 to close at INR1,796.
This represents a full exit for TPG. The private equity firm took a direct stake in the business in August 2013 following the restructuring of Shriram Enterprise Holdings, Shriram Retail Holdings and SCUF into a single entity. TPG had invested INR5.3 billion (then $120 million) for a 49% stake in Shriram Retail in 2008, giving it a 26.7% indirect interest in SCUF.
According to SCUF's 2014 annual report, Norwest Venture Partners is also an investor in the business, with a 6.45% stake. Past backers include ChrysCapital Partners, Bessemer Venture Partners, ICICI Venture and Asiabridge Capital. Last year, Piramal Enterprises took a 9.99% holding in SCUF for INR7.89 billion ($130 million).
In 2013 Piramal agreed to buy a 20% stake in Shriram Capital, the holding company for Shriram Group's financial services businesses, for INR20.14 billion. This followed the acquisition of a 10% interest in Shriram Transport Finance (STF) from TPG for INR16.5 billion ($301.4 million). Earlier that year, the PE firm sold another 9.9% in STF for about INR16.6 billion. It took a 20% stake in the business in 2011, also through a restructuring of entities within the Shriram Group.
TPG has previously invested in two other Shriram entities, taking a 20% stake in Shriram Capital and a 15% interest in Shriram Properties. Both transactions are said to have taken place in 2011.
SCUF is a deposit-taking non-banking finance company that offers loans for small businesses, vehicle financing and against gold. The company reported total income of INR32.4 billion for the 2014 financial year, up from INR30.1 billion in 2013. Net profit rose from INR4.5 billion to INR5.2 billion over the same period.
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