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Two US hedge funds and one domestic investment company are investing Rs 360 crore in Shriram Transport Finance Company (STFC). The Chennai-headquartered company will issue preferential equity shares to these entities. The investors include Blue Ridge Limited Partnership and Tiger Global Management LLC, who are investing Rs 204 crore and Rs 120 crore, respectively, according to a report by Press Trust of India. They will be allotted 6.8 million and 4 million shares respectively. The Indian company, Kampani Finance Ltd, a part of the JM Financial Group, will be allotted 1.2 million shares for Rs 36 crore. The shares are allotted at Rs 300 a share, PTI reports quoting a company executive.
Post-allotment, Blue Ridge will have a 3.22 per cent stake while Tiger Global and Kampani Finance will have 1.89 per cent and 0.57 per cent stake respectively.
This is only part of the Rs 600 crore fund raising planned by Shriram. The balance Rs 240 crore will come from the promoters, Shriram Holdings (Madras) Pvt Ltd, who will be issued 8 million warrants at a subscription price of Rs 30 for each warrant, and at an exercise price of Rs 300 per warrant.
STFC, which started as a finance firm for small truck owners in 1979, already has equity participation from Citicorp, UTI Bank, and private equity funds like Chryscapital and Newbridge Capital.