Shriram Finance To Receive ₹4,630 Crore By Divestment of Stake in Shriram Housing Finance

On May 13, 2024, Shriram Finance Limited (SFL) announced that its Board of Directors had approved the divestment of its housing finance subsidiary, Shriram Housing Finance Limited (SHFL), to Warburg Pincus, a leading global growth investor.

Transaction Details

• Warburg Pincus will buy stakes from each seller via its affiliate, Mango Crest Investment Ltd. The proposed deal, worth ₹4,630 crore, involves SHFL shares and convertible instruments.
• The transaction is subject to regulatory clearances.
• The remaining ownership of SHFL is held by the Mauritius-based private equity firm Valiant Partners L.P. (Valiant), while SFL retains a controlling interest in the company. As part of this deal, Valiant will also totally give up its stock holding to Warburg Pincus.

The acquisition highlights the outstanding value that Shriram Housing Finance has created and represents a critical strategic milestone in the company’s journey. After this deal is completed, Shriram Housing Finance Limited will function independently, maintaining its legacy and goal of helping the nation’s underserved people access housing finance solutions while generating value for its stakeholders.

SFL, SHFL, and Valiant were assisted financially by JM Financial, Barclays, and Avendus. The Shriram Group and Valiant were advised by Trilegal and Anagram in matters of law, and Warburg Pincus was counselled by Cyril Amarch and Mangaldas.

“Over the years, SHFL has built a differentiated business and a strong brand, providing accessible and innovative financial solutions to meet diverse customer needs across the Indian housing finance landscape. The Company has been reporting industry-leading CAGR while building superior asset quality. With the rapid growth in the consumer finance sector, both SFL and SHFL foresee tremendous opportunities in their respective operating segments.” said Mr Umesh Revankar, Executive Vice-Chairman of Shriram Finance Ltd.

He further added, “We believe that at this cusp of growth, Shriram Housing Finance is set to unlock greater value as it empowers underserved millions to own homes. This transaction aims to maximise value creation for both SFL and SHFL, as both companies independently fulfil their respective long-term vision. We welcome Warburg Pincus and look forward to SHFL continuing to build on its legacy and embrace its next growth phase.”

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