TPG to sell 20% stake in Shriram City Union, in talks with PE funds

This could well be the last of the large equity transactions at the Shriram Group in the last couple of years. Sources with direct knowledge share that private equity firm, TPG Capital has put its 20% stake in Shriram City Union Finance on the block. TPG is in talks with several private equity players like KKR, Apax, GAAP, Warburg Pincus, to name a few, sources shared. As per the current market price, the deal could be valued at around Rs 2,500 crores.

Shriram City Union Finance ended the day at Rs 1,947.40; up 2.20%, on the BSE.

TPG bought 22% stake in Shriram City Union Finance in August 2013 for Rs 1,207 crores and could be making a hefty profit on its investments with the stock now trading at over Rs 1,960/share levels. Piramal Enterprises which had bought 9.9% stake in Shriram City in June 2014 for Rs 790 crores is not picking up the TPG stake but may have a role to play given its huge holding in the parent company, Shriram Capital.

Sources share that the new buyer will be interested in the protective rights of a shareholder and the Shriram Capital owners, Shriram Group, Sanlam and Piramal Enterprises will define these for the new financial investor in Shriram City Union Finance.

None of the above mentioned private equity funds or Shriram Group offered a comment on ET Now’s query on the deal development. When ET NOW broke the news in the trading hours on Wednesday, March 18, Shriram City Union’s stock spiked up by 3.33% to Rs 1,969/share.