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Warburg Pincus secures its largest deal in India, buying Shriram Housing Finance (SHF) for ₹4,630 crore. Shriram Finance is to receive a minimum of ₹3,909 crore. Post-sale, SHF to operate independently with existing management. Industry forecasts 12-14% annual growth in housing finance.
Warburg Pincus secures its largest deal in India, buying Shriram Housing Finance (SHF) for ₹4,630 crore. Shriram Finance is to receive a minimum of ₹3,909 crore. Post-sale, SHF to operate independently with existing management. Industry forecasts 12-14% annual growth in housing finance.
US investment giant Warburg Pincus strikes its largest deal in India, acquiring Shriram Housing Finance Ltd (SHFL) for ₹4,630 crore, marking a significant move in India's housing finance sector.
Warburg Pincus will gain a controlling stake in SHFL from Shriram Finance Ltd (SFL) and other sellers via its affiliate Mango Crest Investment Ltd. Shriram Finance holds an 85% stake in SHFL, with Valiant Partners LP, Mauritius, owning the rest.
Explore: Shriram Finance Limited Share Price
Umesh Revankar, Executive Vice-Chairman of Shriram Finance, emphasises that the transaction aims to enhance value creation for both SFL and SHFL, aligning with their respective long-term visions.
The acquisition comes amidst increasing interest in India's growing home mortgage finance market. The housing finance sector is expected to expand at 12-14% annually, requiring significant additional funding for growth.
Following the deal, SHFL will function as a standalone entity, with current management led by Ravi Subramanian continuing in their roles.
Warburg Pincus plans to invest ₹1,000 crore post-sale to grow SHFL's loan book. Shriram Group intends to utilise the proceeds to expand new financial services businesses and strengthen its balance sheet.
Shriram Housing Finance, with assets exceeding ₹10,000 crore, primarily operates in affordable housing, competing with key players like Bajaj Housing Finance and LIC Housing Finance.
Sources:
https://www.livemint.com/companies/news/warburg-pincus-shriram-group-housing-finance-arm-rs-4-630-crore-deal-11715609748113.html
https://www.moneycontrol.com/news/business/warburg-pincus-to-invest-rs-1000-crore-in-shriram-housing-to-ramp-up-operations-says-umesh-revankar-12721199.html
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