Shriram Housing Finance (SHF), the housing finance subsidiary of Shriram Finance (SFL) is in the process of raising $100 mn growth capital.
- It targets to conclude the fund raise by end June 2023
- Market is speculating Baring to be close to finalise a deal. MD has informed that multiple people are in the fray.
- SHF had AUM of Rs 7,200 crore at the end of December 2022 and it had earned net profits of Rs 101 crore during 1st 9 months of FY 23.
SHF, with a focus on the affordable housing segment, had started operations in November 2010. It grew from an AUM of Rs 1,000 cr end September 2015 to Rs 7,200 cr end December 2023.
About 35-40% of Shriram Housing’s business comes from the southern states – Karnataka, Tamil Nadu, Andhra Pradesh and Telangana. It also has a presence in Gujarat. With a network of 94 branches, it has an average loan size of Rs 16.6 lakh.
Last year, the Company had received a total equity infusion of Rs 500 crore from the parent. Currently, SFL holds 85% of SHF while the rest is with Valiant Mauritius (P) Ltd.
Given the pedigree of the group and increasing investors’ interest in the housing finance market, a good preferential deal into SHF seems to be a given.
Speculations are Rs 1,000 cr for 15% stake dilution.
Multiple investors are claimed to be interested in the deal and Company is expected to finalise the deal by March end.
It seems there are differences of valuation expectation between the Company and the investors.
There is a possibility that the external equity raise plan may get deferred because of that and Shriram Finance may have to provide the additional capital needed in the short term.
TPG has sold entire 2.65% stake in Shriram Finance (SF) for Rs 1,400 cr
It has been associated with Shriram Group for over 18 years. It had first invested in the flagship company – Shriram Transport Finance Company (now SF). After that, it had invested in other companies – Shriram City Union Finance and Shriram Capital (both merged into SF).
Who knows… maybe TPG has sold from SF to invest in the housing business.
The speculations have surfaced again.
In fact now there are speculations that Shriram Finance may also sell 100% of equity of the housing finance business; it not being core to the Company’s operations.
I am not sure what is meant by not being core. Housing finance is core to every NBFC’s business in current times.
Guess, we will only get to know as the story unfolds.
Warburg and Barings are speculated to have submitted bids to buy Shriram Housing.
The sale likely is dependent on the matter of valuation. Shriram pegs it at Rs 6,500 crore, inclusive of a control premium, but the offers are to be in the Rs 5,300-5,500 crore range.
Company has denied to confirm the speculations.