India's Piramal commits $131m to Shriram City Union Finance

According to a disclosure, Piramal will buy 6.58 million fresh shares in SCUF via a preferential allotment. SCUF ‘s current backers include TPG Capital, Norwest Venture Partners, Bessemer Venture Partners and ICICI Venture.

AVCJ Research shows that Bessemer and ICICI were among the earliest investor, having invested INR2.6 billion in the company alongside ChrysCapital in April 2008. TPG entered around September the same year, paying INR9.61 billion for a 46.7% stake. The most recent investment came via Norwest, which paid INR1.2 billion for an 8% stake in mid-2009.

Piramal's investment will dilute TPG's stake from 22.64% to 20.36%. Also, Piramal will become the second-largest shareholder of the firm not including the promoter.

SCUF is a deposit-taking NBFC which offers loans for small businesses, vehicle financing and against gold. For the 2013 financial year it recorded net income of INR4.49 billion, up 32.94% year-on-year. The company has seen compound annual growth of around 37% over the past five years.

Piramal has a relationship with SCFU's parent company, Shriram Group, which predates this latest transaction.

Earlier this month, Piramal agreed to buy a 20% stake in Shriram Capital, the holding company of Shriram Group's financial services business, which is also backed by TPG, for INR20.14 billion. Piramal bought 10% of Shriram Capital last July for a reported INR6.5 billion.

Shortly before that the group also bought a 10% stake in Shriram Transport from TPG for INR16.5 billion - providing the PE firm with a partial exit.

 

 

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• Topics
• South Asia
• Venture
• Buyout
• Exits
• India
• Financial Services
• TPG Capital
• ICICI Venture Funds Management Company
• Bessemer Venture Partners
• ChrysCapital Management
• Norwest Venture Partners
• Exit