The housing financing arm of Shriram Financing Ltd. was sold to Warburg Pincus on Wednesday, December 11th, for ₹3,929 crore. The lead firm of the Shriram group sold all of its 84.44 per cent stake on a fully diluted basis. After the sale of the stake was completed, Shriram Housing Finance was no longer part of Shriram Finance.
According to the company’s statement, Shriram Housing Finance Limited (SHFL) has made a substantial contribution to the promoter group’s financial inclusion by concentrating on the housing requirements of the underserved segments.
“The sale of Shriram Finance’s stake in Shriram Housing Finance is done to Warburg Pincus’ affiliate – Mango Crest Investment Ltd.,” said Shriram Finance in a regulatory filing to the stock exchanges on Wednesday. “The company has today transferred 308,111,107 equity shares of SHFL to the Purchaser for a consideration of ₹39,29,03,28,364.64,” it added.
In May 2024, Shriram Finance Ltd. declared it was selling its housing finance division to Mango Crest Investment, an affiliate of Warburg Pincus. One of the top private equity or international growth investment firms is Warburg Pincus. A completely diluted sale of about 85% of the shares has taken place.
The private equity firm Valiant Partners L.P. (Valiant), Mauritius, controls the remaining shares in Shriram Housing, with Shriram Finance holding a majority position. Valiant will also fully sell its interest to Warburg Pincus as part of the deal. In this transaction, JM Financial Ltd served as a financial advisor to Valiant, SHFL, and Shriram Finance Ltd.
It has obtained all necessary clearances from stakeholders and regulatory bodies. In a statement, the business said, “With this transaction, SHFL is well-positioned to expand its operations further and accelerate its growth under Warburg Pincus’ ownership and guidance.” “
Two non-bank lenders that specialize in affordable housing are Shriram Housing Finance and Home First Finance. Shriram Housing Finance is not listed on any public markets, however, Home First Finance’s shares are.
“We are pleased to announce the completion of this transaction and extend our heartfelt best wishes to the team as they embark on this new chapter under Warburg Pincus. We are confident that the team will continue to drive success through financial inclusion and affordable housing for individuals. We look forward to seeing it scale to greater heights under the stewardship of Warburg Pincus,” said Umesh Revankar, Executive Vice Chairman of Shriram Finance.
Shriram Finance’s strategic aims are in line with the sale, which enables it to concentrate more intently on its main business divisions and expansion prospects. In its stock exchange statement today, the business stated, “This transition underscores Shriram Finance’s commitment to creating value for its stakeholders while fostering long-term sustainability.” Shriram Finance’s stock ended Wednesday’s trading session at 1.90r cent higher on the BSE, trading at ₹3,247.45 a share.
