Norwest Venture Partners sells 2.78 per cent stake in Shriram City Union Finance

CHENNAI: Private equity firm Norwest Venture Partners (NVP) sold a further 2.78% stake or 16.5 lakh shares, in Chennai-based Shriram Group’s retail financing arm Shriram City Union for Rs 206.50 crore in the open market.

By doing so, the firm made a nearly 4 times returns on its five-year-old investment, in line with its stated goal.

According to the bulk deal data on Bombay Stock Exchange, Norwest Venture sold the shares at Rs 1,250 apiece, which was picked up by Wasatch Small Cap Growth Fund.

This is the second tranche of sale by Norwest, after selling 3.94 lakh shares for nearly Rs 49 crore last year.

Norwest Venture had bought an over 8% stake in Shriram City Union for Rs 120 crore or at 315.62 a share from Merrill Lynch five years ago. As of March 2014, Norwest had about 38.23 lakh shares or 6.45% stake in the firm.

Norwest's partial exits, comes just weeks after Piramal Enterprises bought nearly 10% of Shriram City Union for Rs 789.5 crore through preferential allotment of shares.

Shriram City Union is planning to use the funds from Piramal for acquisitions in housing finance segment.