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Shriram Finance, Valiant divest entire stakes in affordable housing finance unit for ₹4,630 crore

Shriram Finance Ltd. will sell its entire stake in affordable home-finance subsidiary Shriram Housing Finance Ltd. (SHFL) to Warburg Pincus’s affiliate Mango Crest Investment Ltd. which, together with the holding Mango bought from Valiant Partners, takes the transaction value to ₹4,630 crore.

The board of Shriram Finance Ltd., which met here on Monday, approved the proposal.  The company said it would receive a minimum consideration of ₹3,909 crore along with certain additional amounts based on the occurrence of identified events.
The proposed transaction would be subject to receipt of applicable approvals from regulatory authorities and fulfilment of other customary conditions. 
“As per reasonable estimates, the expected time of completion of the transaction is February 7, 2025,” it said in a filing with exchanges.  The buyer has also committed to invest an additional ₹1,000 crore into SHFL as part of growth capital for the housing finance lender.

“This is Warburg’s biggest deal in India ever since it entered and this is the biggest deal in affordable housing space,” said Umesh Revankar, Executive Vice Chairman,
Shriram Finance Ltd.

“This is a win-win deal because  Shriram Housing gets growth capital and a global investor will back it. Shriram Finance gets capital to fund its own growth,” he said. 

“The existing team at Shriram Housing will continue to run the business under the new investor,” he added.  Post the deal, Shriram Housing will go for a rebranding and drop the “Shriram” name,” he added.

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