Shriram in talks to sell home finance unit for ₹5,000 cr

The group will use the proceeds from a successful sale to expand new businesses in the financial services space

- Anirudh Laskar

The Shriram Group is in talks with US-based fund management giants Warburg Pincus Llc and Bain Capital LP to sell its housing arm Shriram Housing Finance Ltd for around ₹5,000 crore, two people directly familiar with the development said.

Shriram Housing Finance is a midsize housing finance company with assets of over ₹10,000 crore. The sale is part of the Chennai-headquartered conglomerate’s plan to redesign its growth strategy.

A Shriram Group spokesperson declined to comment.

Over the past few weeks, the bankers appointed by the group's listed flagship Shriram Finance Ltd, which holds 85% in Shriram Housing Finance as the promoter, opened discussions with Bain Capital and Warburg Pincus, the people cited above said. If the negotiations conclude, a deal could be closed before the June quarter, they added.

"(We) Have received a phenomenal interest from several suitors. There are buyers with bids of up to ₹5,000-5,500 crore and offers are still coming. It's a neat business and bidders are credible. So, evaluation before a sale may not take much time," the first of the two people cited above said.

The Shriram Group has appointed investment bankers from Barclays Bank Plc, JM Financial Ltd and Avendus Capital Pvt. Ltd to shortlist buyers, the two people added.

Spokespeople from JM Financial and Barclays declined to comment while queries sent to Bain, Warburg Pincus and Avendus remained unanswered.