Ajay Piramal-led, Piramal Enterprises, has agreed to buy a 20% stake in financial-services company Shriram Capital for a total consideration of Rs 2,014 crore. Piramal is expected to take stake from a fresh issue of shares by the company, which will dilute the stakes of the current shareholders. In a statement to the press on Thursday, the company stated that as part of the deal, Piramal Enterprises will get two seats on the board of Shriram Capital.
Piramal Enterprises stated that UBS was its sole financial advisor while Amarchand & Mangaldas & Suresh A Shroff & Co. acted as the sole legal advisors to it. Trilegal was the sole legal advisor to Shriram Capital. The deal follows last year’s purchase of a stake in Shriram Transport Finance Ltd., another affiliate of Shriram Group, Mumbai-based Piramal Enterprises said in a statement today.
Shriram Capital owns assets worth Rs 78,000 crore and has a network of 53,000 employees spread across 2,600 offices in India. Shriram Capital’s operating units have more than 9 million customers, according to the release. Piramal's financial services business has a loan book of Rs 2,000 crore, lendng primarily to real estate and education segments.
Ajay Piramal, who sold his pharmaceuticals business to Abbott Laboratories for $3.8 billion in 2010, is seeking to expand beyond providing funding for infrastructure and property projects. Financial services was Piramal Enterprises’ fastest-growing business last year, a company presentation on its website shows.
The deal follows last year’s purchase of 9.9% stake in Shriram Transport Finance, another affiliate of Shriram Group, the statement said.
This month, Piramal Enterprises announced the sale of an 11% in its Indian mobile-phone unit to Vodafone Group Plc’s local subsidiary for Rs 8,900 crore.