Piramal Enterprises Sells 8.34% Stakes In Shriram Finance To Third-Party Investors

Piramal Enterprises, a diversified non-banking financial company (NBFC), announced today, June 21, that it has sold its entire direct investment of 8.34% in the fully paid-up share capital of Shriram Finance Limited to third party investors via block deal.

“We wish to inform you that the Company has sold its entire direct investment of 8.34% in the fully paid-up share capital of Shriram Finance Limited to third party investors, on the floor of the stock exchange,” the company said in a statement.

Share prices of both Piramal Enterprises and Shriram Finance rallied higher today, on Wednesday, after the company's announcement. Shares of Piramal surged by 10 per cent to Rs 1,715.35, while Shriram Finance shares changed hands in block deals worth Rs 4,823.71 crore.

The shares offloaded by the NBFC company is worth Rs 3.1 crore. The floor price for the block deal is likely to be Rs 1,483 per share, according to sources. This would mean a five per cent discount on current market price of Shriram Finance's stock is Rs 1,559.45 on the BSE. 

Morgan Stanley, which is an investment banking firm, will be the sole broker of the deal, as per reports. The decision by the Piramal Enterprises comes after private equity firm TPG also divested its entire 2.65 per cent stake in the Shriram Finance for Rs 1,390 crore via open market transaction.

TPG India Investments offloaded the shares in 18 tranches. The buyers in this deal included ICICI Prudential Life Insurance Company, Norges Bank, Societe Generale ODI, Nippon India Mutual Fund, Aditya Birla Sun Life MF, Kotak Mahindra Life Insurance Company,  and Morgan Stanley Asia Singapore, among others.

Shriram Finance reported a consolidated net profit of Rs 1,288 crore, which was up 18 percent year-on-year.