Shriram Fin to sell home loan arm to Warburg Pincus for ₹4,630 cr
PE’s a…liate, Mango Crest Investment, to buy out Valiant Partners, too
New York-based private equity firm Warburg Pincus will acquire Shriram Housing Finance Limited (SHFL) in a deal valued at ₹4,630 crore in equity and convertible instruments.
Warburg Pincus will acquire the stake through its aliate Mango Crest Investment Ltd. At present, Shriram Finance Ltd holds a controlling stake in SHFL with private equity firm Valiant Partners L.P. (Valiant), Mauritius, holding the rest.
As a part of this transaction, Valiant and Shriram Finance will completely divest their stakes to Warburg Pincus. The existing management team of SHFL, led by Ravi Subramanian, Managing Director and Chief Executive Ocer, will continue to lead the business.
PAN-INDIA PRESENCE
The company has a pan-India presence with 155 branches, an AUM of ₹13,762 crore, net worth of ₹1,924 crore and revenues of ₹1,430 crore, as of March 31, 2024.
Umesh Revankar, Executive Vice-Chairman, Shriram Finance, of elevated interest rates, delayed resolutions/recoveries in wholesale loans and competition from banks may pose downside risks.
Ravi Subramanian said, “The aordable housing finance segment is poised for significant growth. Our focus on innovative customer-centric solutions, product diversification, and superior customer experience remains steadfast, supported by cutting-edge technology and analytics.”
Warburg Pincus has been investing into India over the last 25 years. Narendra Ostawal, Head of India Private Equity, Warburg Pincus, said, “Warburg Pincus has a history of partnering with exceptional teams, particularly within financial services and we are excited to support Ravi and the management team as the company advances into its next phase of growth.”
India’s housing finance space has seen some restructuring over the last six months. While Blackstone-backed Aadhar Housing Finance recently raised ₹3,000 crore through an initial public oering, Piramal Enterprises has decided to merge with its unlisted subsidiary, Piramal Capital and Housing Finance Ltd.