Piramal Enterprises buys 9.99% stake in Shriram City Union

The acquisition, by way of a preferential allotment of shares by Shriram City Union, was at a price of Rs. 1,200/- per equity share

Piramal Enterprises Ltd. announced that it has acquired 65,79,840 equity shares of Shriram City Union Finance Limited, the retail focused Non-banking Financial Company (NBFC) of the Shriram Group. The acquisition, by way of a preferential allotment of shares by Shriram City Union, was at a price of Rs. 1,200/- per equity share. The total consideration paid was Rs. 790 Cr. Shriram City Union is among the more important players in the retail financing space, with Assets under Management of Rs. 14,668 Cr in March 2014. The company offers multiple loan products to small business owners and for acquiring assets such as two wheelers, commercial vehicles, passenger vehicles, consumer durables and homes. It also offers loans against gold ornaments and for personal consumption. In April this year, Piramal had acquired an effective 20% equity stake in Shriram Capital Limited, the overarching holding company for the Financial Services and Insurance entities of the Shriram Group, for a consideration of Rs. 2,014 Cr. Piramal had also invested Rs. 1,636 Cr in May 2013 to acquire ~9.9% equity in Shriram Transport Finance Company Limited, one of the listed NBFCs forming part of the Shriram Group. Commenting on the partnership, Ajay Piramal, Chairman of Piramal Enterprises Limited said, “We are happy that the shareholders of Shriram City Union Finance have approved our investment in the company. This capital infusion will support its present business model and help further its growth plans over the next few years. Shriram has a good team and we are confident it will create long term value for shareholders of both companies. Shriram is well positioned to take advantage of the India story, and we see great potential for growth.”