Piramal Enterprises on Thursday said it will acquire 20 per cent stake in Shriram Capital for an aggregate consideration of Rs 2,014 crore.
The stake purchase will add muscle to Piramal's financial services businesses. "This investment builds our presence in financial services sector and we see long term shareholder value creation from our partnership with Shriram Capital," said Piramal Enterprises Chairman Ajay Piramal.
Shriram Capital is the unlisted holding company for as many as five businesses, including Shriram Transport Finance Company, where Piramal Enterprises already owns a 10 per cent stake. Piramal had bought the stake from private equity company TPG in May last year.
Piramal's latest investment is in the holding company, which has interests in Shriram Life Insurance and General Insurance, retail broking, an asset management company and Shriram City Union, which gives secured and unsecured home and personal loans, said an official release.
The three listed businesses — transport finance, asset management company and City Union — have a combined market capitalisation of Rs 23,601 crore.
R Thyagarajan, founder, Shriram Group said, "Piramal's entry into Shriram Capital is a significant milestone for the financial services business to take a quantum leap in the group's contribution to the community at large."