Piramal Group buys 10% in Shriram Transport Finance from TPG for Rs1,652 crore

Cash-rich diversified conglomerate Piramal Group today said that it has acquired around 10-per cent stake in Shriram Transport Finance Company Limited (STFCL) from US private equity firm TPG Capital, for Rs1,652 crore ($302 million).

''Acquisition of this stake in STFCL is in line with our strategy for building our presence in financial services sector and we see long term shareholder value creation from this stake acquisition,'' said, Ajay Piramal, chairman of Piramal Group.

''Shriram Transport is well known for their strong governance and business ethics, which resonates well with Piramal Group' business philosophy,'' he added.

Piramal Group purchased 228.47 lakh shares of Chennai-based STFCL in the open market via block deals at Rs723 per share.

Founded in 1979 with the aim to finance transporters for buying trucks, STFCL has expanded its business from vehicle financing to consumer finance, life and general insurance, stock broking, chit funds and distribution of financial products such as life and general insurance products and units of mutual funds.

Through its network of 528 branches and service centres across, STFCL is now the country's largest financer of trucks and one of the largest asset financing NBFCs.

The company, which generated revenues of Rs7,014 crore last year and has assets over Rs52, 717 crore, is one the serious contender for a banking licence.

Apart from these financial services, the group is also present in non-financial services business such as property development, engineering projects and information technology.

After selling its healthcare unit's domestic formulations business in 2010 to Abott Laboratories for Rs17,020 crore, Piramal Group had said that it would enter the financial services business.

The Piramal Group is present in various sectors, including pharmaceuticals, specialty glass, financial services and real estate.