Shriram Finance Ltd. completed the sale of its housing finance subsidiary to Warburg Pincus affiliate on Wednesday, December 11, for ₹3,929 crore. The flagship company of the Shriram group sold its entire 84.44 per cent shareholding on a fully diluted basis. With the completion of the stake sale, Shriram Housing Finance has ceased to be a subsidiary of Shriram Finance.
According to the company’s statement, Shriram Housing Finance Limited (SHFL) has contributed significantly to the promoter group’s financial inclusion by focusing on the housing needs 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.
Shriram Finance sells housing finance biz to Warbug Pincus
Shriram Finance Ltd announced in May 2024 the sale of its housing finance subsidiary to Warburg Pincus’s affiliate company, Mango Crest Investment. Warburg Pincus is a leading private equity or global growth investor firm. Nearly 85 per cent of the shareholding has been sold on a fully diluted basis.
Shriram Finance holds a controlling stake in Shriram Housing, while private equity firm Valiant Partners L.P. (Valiant), Mauritius, owns the rest. As part of the transaction, Valiant will also completely divest its stake to Warburg Pincus. JM Financial Ltd acted as financial advisor to Shriram Finance Ltd, Valiant, and SHFL on this transaction.
It has achieved all requisite approvals from regulatory authorities and stakeholders duly secured. “With this transaction, SHFL is well-positioned to expand its operations further and accelerate its growth under Warburg Pincus’ ownership and guidance,” said the company in its statement. ”
Shriram Housing Finance and Home First Finance are non-bank lenders focused on affordable housing. Shares of Home First Finance are listed on the stock exchanges, while Shriram Housing Finance is unlisted.
“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.
The sale aligns with Shriram Finance’s strategic priorities, allowing it to sharpen its focus on its core business segments and growth areas. “This transition underscores Shriram Finance’s commitment to creating value for its stakeholders while fostering long-term sustainability,” said the company in its stock exchange filing today. On Wednesday, shares of Shriram Finance settled 1.90 per cent higher at ₹3,247.45 apiece on the BSE.
