Shriram Finance greenlights sale of housing finance arm to Warburg Pincus for Rs 4,630 Cr

Shriram Finance Limited (SFL), has approved the sale of its housing finance subsidiary Shriram Housing Finance Limited (SHFL), to Warburg Pincus, a growth investor.

The transaction, valued at Rs 4,630 crores for equity and convertible instruments of SHFL, is subject to regulatory approvals and will be acquired through its affiliate Mango Crest Investment Ltd.

SFL holds a majority stake in SHFL, with the remaining shares held by Valiant Partners L.P., a private equity firm based in Mauritius.

“With the rapid growth in the consumer finance sector, both SFL and SHFL foresee tremendous opportunities in their respective operating segments. We believe that at this cusp of growth, Shriram Housing Finance is set to unlock greater value as it empowers underserved millions to own homes," said Umesh Revankar, Executive Vice-Chairman, Shriram Finance Ltd.

SHFL will operate as a standalone entity after the transaction, with its existing management team, led by Ravi Subramanian, continuing to lead the business.

"This transaction aims to maximise value creation for both SFL and SHFL, as both companies independently fulfill their respective long-term vision. We welcome Warburg Pincus and look forward as SHFL continues to build on its legacy and embrace its next phase of growth,” he added.

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Founded in 1979, SFL, an NBFC, serves over 84 lakh customers with commercial vehicle loans, two-wheeler loans, and MSME financing.

SHFL, a key player in the affordable housing segment, has experienced a 56% CAGR in AUM growth over the last four years, playing a transformative role in the Indian housing financing industry.

JM Financial, Barclays, and Avendus served as financial advisors to SFL, SHFL, and Valiant. While, Trilegal and Anagram provided legal advice to Shriram Group and Valiant, while Cyril Amarchand Mangaldas advised Warburg Pincus on the transaction.