Ajay Piramal set to join Shriram Capital board

NEW DELHI: Ajay Piramal, the billionaire owner of Piramal Enterprises, is set to take over as the non-executive chairman of Shriram Capital, the holding company for the Shriram Group’s financial services business, said two people aware with the development.

“The founding promoter of Shriram Group, R Thyagarajan, who virtually run the financial behemoth through his trusted lieutenants, has invited Ajay Piramal to join the board of the flagship unlisted company,” said one of them. “Decision will be taken at the next meeting on November 15.” Shriram Capital has roughly Rs 90,000 crore in loans assets in areas ranging from truck finance to consumer finance and insurance.

Piramal has invested Rs 4,556 crore in Shriram Group in past 18 months. Starting in May 2013, he has picked up minority stakes in Shriram Capital and two listed firms. Piramal will replace Arun Duggal, who has already resigned from the board of Shriram Capital, said a third person familiar with the development. A Shriram Group spokesperson declined to comment as did a Piramal group representative.

“Ajay will be made chairman of Shriram Capital in a few weeks or maybe in a few months,” Shriram Group founder Thyagarajan had told ET in August. “These changes will be gradual and beneficial over a period of time.” “One of the key reasons to bring in Ajay Piramal on board is to change the DNA of Shriram Group and to (bring) more aggression in our expansion plan,” said a top executive. Shriram Group will use Piramal’s expertise to focus on inorganic growth.

The three main partners – Shiram Employee Trust, South Africa-based Sanlam Group and Piramal Group-- will become equal partners in Shriram Capital over the period, said one of those cited above. This in effect means that the three partners will equally acquire the stake owned by American private equity fund TPG Capital as and when it decides to exit. The fund owns a stake of about 9%.