Shriram Finance Sells SHFL to Warburg Pincus: A Strategic Move in India's Financial Sector
May 14, 2024
In a significant development, Shriram Finance Limited (SFL) has announced the sale of its subsidiary, Shriram Housing Finance Limited (SHFL), to global investment firm Warburg Pincus for Rs 4,630 crore. The transaction involves equity and convertible instruments of SHFL and is subject to regulatory approvals.
This strategic divestiture is aimed at capitalizing on burgeoning market opportunities within the consumer finance sector. Umesh Revankar, Executive Vice-Chairman of SFL, highlighted the potential for SHFL to unlock greater value in serving the underserved housing finance market in India.
Post-acquisition, SHFL will operate as an independent entity under its current management team led by Ravi Subramanian. The move is intended to maximize value creation for both entities, allowing them to pursue their long-term objectives independently.
Shriram Finance, a leading NBFC founded in 1979, serves over 84 lakh customers with various financial products. SHFL has shown significant growth in the affordable housing segment, with a robust 56% CAGR in Assets Under Management over the past four years.
The transaction was advised by financial firms JM Financial, Barclays, and Avendus, with legal counsel provided by Trilegal and Anagram for Shriram Group and Valiant, and Cyril Amarchand Mangaldas for Warburg Pincus. This acquisition underscores confidence in India's financial sectors, particularly in housing finance, signaling positive growth prospects and investment opportunities.