TPG exit from Shriram to take time: Thyagarajan

Though the process has begun for TPG Capital to exit Shriram Capital (SCL), it is difficult to say by when this would happen, said R Thyagarajan, founder of the Shriram Group.

TPG, a private equity investor, has 10 per cent stake. However, says Thyagarajan, global enthusiasm is not high on the Indian economy. So, international investors will be cautious on investing in India. Particularly in non-bank finance companies (NBFCS).

An investment banker had been appointed for the exit process, he said, and discussions were on. However, “it is very difficult to say when (a deal will be concluded)”. Piramal Enterprises (PEL) is also looking at selling its stake, of around 20 per cent, in the unlisted holding company of the group’s listed NBFCS, Shriram Transport Finance Company (STFC) and Shriram

City Union Finance.

“There is some interest but not strong enough to reach a particular conclusion. This (situation) will go on for quite some time,” said Thyagarajan.

According to reports, Blackstone Group and Carlyle Group were among the foreign investors in talks to acquire these stakes. A report, quoting informed sources, said the valuation these sellers are looking at is ~8,000 crore. PEL owns equity stakes in three Shriram Group companies. It started the process of exiting the Chennaibased financial services group in June, by selling its entire 9.96 per cent stake in STFC for ~2,300 crore, to a clutch of 26 investors. Shriram Ownership Trust, which manages the business of Shriram Group companies, would evaluate various restructuring initiatives, including rationalisation of the holding structure, to help optimise cost and for synergy, went an earlier statement from D V Ravi, then managing trustee and MD of SCL.

"We understand PEL’S evaluation of exit from SCL is part of its long-term strategy to fund growth of its financial services business. TPG’S evaluation of an exit from SCL is consistent with its investment review practices, and takes into account, among other factors, the period of time TPG has been invested in SCL. If and when definitive documents for such a transaction are executed, appropriate disclosures will be made in accordance with applicable laws," went an official statement.

Blackstone Group and Carlyle Group were among the foreign investors in talks to acquire these stakes. A report, quoting informed sources, said the valuation these sellers are looking at is ~8,000 cr