Piramal Enterprises to sell entire stake in Shriram Finance via block deal: Report

Piramal Enterprises is likely to sell its entire stake of 8.34% in Shriram Finance through a block deal, according to reports.

Under the transaction, Piramal will offload about 3.1 crore shares at a price of Rs 1,483 per unit, which is a 5% discount from the current levels.

This is the second such deal in Shriram Finance after private equity firm TPG Investments, too, offloaded its entire stake in the company.


TPG India Investments has sold about 99.18 lakh shares or 2.64% stake in the company. The transaction was done at a weighted average price of Rs 1,401 per unit and the PE firm went home with Rs 1,389 crore. Among the buyers were Morgan Stanley, Bajaj Allianz Life Insurance, ABSL MF, DSP MF.

Shriram Finance is a majority public-owned company with 74.49% stake, while the rest of 25.51% is owned by promoters. Among the public shareholders, mutual funds have about 6.04% stake, while foreign investors have about 44.33%.

The company provides consumer finance services, offering automobile, commercial vehicle, business, and gold loan services. Shriram Finance was formed following the merger of Shriram City Union Finance and Shriram Capital into Shriram Transport Finance.

In the March quarter, Shriram Finance reported a 20% rise in net profit at Rs 1,308 crore. The company's net interest income stood at Rs 4446 crore in the said period. On Tuesday, the stock closed 6.1% higher at Rs 1559.45 on BSE.

Technical Outlook
Technically, analysts say the stock has formed a trend reversal pattern-Doji tad below its prior supply zone of Rs 1,510-1,535.

"In the past, the stock reversed downwards after testing that zone and tested its long-term moving averages subsequently. The key technical indicators oscillated around the overbought zone," said Jatin Gohil, Technical and Derivative Research Analyst at Reliance Securities.

"As per the current set-up, history may repeat itself, which could drag the stock towards its long-term moving averages (100-day and 200-day SMAs), which are placed between Rs1,310 and 1,298. However, a stable move above that supply zone may break the jinx and support an exponential rise towards Rs1,650-1,700 zone," he added.