INSUBCONTINENT EXCLUSIVE:
By Baiju KaleshTPG Capital has paused a sale of its stake in privately-held Indian financier Shriram Capital Ltd
as the country’s lingering shadow banking crisis hurts valuations, according to people with knowledge of the matter.
The private
equity’s plan to sell its 10 per cent stake has been held back, and will likely resume only as soon as the next financial year starting in
April, said one of the people, who asked not to be identified as the information is private.
In August, five foreign investors, including
Blackstone Group Inc and Carlyle Group LP, were shortlisted for talks to acquire a combined 30 per cent stake in Shriram Capital from
The sellers were seeking a valuation of 80 billion rupees ($1.1 billion) for the stake, people familiar with the matter have said.
The halt
came as debt concerns spread at Indian lenders including Indiabulls Housing Finance Ltd
Last week, the Reserve Bank of India had to reassure investors that the banking system is “safe” after depositors lined up to pull money
from a small Mumbai-based bank.
Deliberations are ongoing, and TPG could restart a sale when appropriate, the people said
A Mumbai-based representative for TPG declined to comment.
A stake in Shriram Capital will give the buyer shares in publicly traded units,
Shriram Transport Finance Co., and Shriram City Union Finance Ltd
Piramal Enterprises bought a 20 per cent stake in the holding company in 2014, while TPG has been an investor in Shriram Capital with a 10
per cent stake since 2011.
