Piramal Enterprises to acquire 20% stake in Shriram Capital for Rs2,014 crore
Piramal Enterprises Ltd. (Piramal) today announced that it will acquire 20% equity stake in Shriram Capital Ltd (Shriram Capital), a financial service company for Rs2,014 crore to enhance its presence in the financial service sector. Ajay Piramal's Mumbai-based Piramal Enterprises, operates in the pharmaceutical, financial services and information management sectors.
“This investment builds our presence in the financial services sector and we see long term shareholder value creation from our partnership with Shriram Capital. The Company is well known for its culture and values, which resonates well with Piramal Group’s philosophy,” said Ajay Piramal, chairman of Piramal Enterprises.
Last year in May, Piramal had invested Rs1,636 crore in Shriram Transport Finance Company Ltd and acquired 9.9% equity shares.
In 2010,Piramal Healthcare Ltd sold its domestic formulations business to Abbott Laboratories for about USD 3.8 billion. Earlier this month, Piramal Enterprises sold its 11% stake in Vodafone India to Britain's Vodafone Group Plc for Rs8,900 crore.
Commenting on the aquisition, R Thyagarajan, founder of Shriram Group, said “Shriram Group has pioneered providing financial services to the under-served section of the Economy. Our success over the last four decades has been possible only through strategic partnerships. Piramals’ entry into Shriram Capital is a significant milestone for the Financial Services businesses to take a quantum leap in the Group’s contribution to the community at large.”
Shriram Capital is the holding company for the financial services and insurance entities of the Chennai-based group, including Shriram Transport Finance Co and Shriram City Union Finance. It was created to optimise synergies across the group's companies. Shriram Capital's operating entities have over 9 million customers, more than 53,000 employees across 2,600 offices, net profit of Rs800 crore and assets under management in excess of Rs78,000 crore.
Piramal Enterprises shares closed 1.10% up on Thursday at Rs602 on the BSE. While 30-share benchmark Sensex closed 1.54% up at 22,620.
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