Ajay Piramal, head of business conglomerate Piramal Enterprises, will take over as chairman of privately held financial services powerhouse Shriram Capital Limited, the holding company for the Chennai-based Shriram group’s various financial services units, according to a news report by The Economic Times citing a senior executive of the company.
Shriram Capital’s current chairman Arun Duggal will continue as director and will also head the Shriram Ownership Trust, which presently holds 44 per cent stake in Shriram Capital, Shriram group founder R Thyagarajan told the paper.
Earlier in April this year, Piramal Enterprises agreed to acquire 20 per cent equity stake in Shriram Capital Ltd for Rs 2,014 crore ($334 million) after it picked 9.9 per cent of Shriram Transport Finance, one of the listed NBFCs under Shriram Capital, for Rs 1,636 crore last year from American private equity firm TPG Capital.
Piramal Enterprises also bought 9.9 per cent of consumer lending finance company Shriram City Union Finance in June this year for Rs 790 crore.
“Ajay will be made chairman of Shriram Capital in a few weeks or may be in a few months…These changes will be gradual and beneficial over a period of time,” Thyagarajan said.
Piramal Enterprises sold off its domestic formulations business to Abbott Laboratories in 2010 for Rs 18,000 crore. It has been using the cash for expanding its financial services business which includes investments in infrastructure.
The company also booked a huge profit after it ploughed money and recently divested its 11 per cent stake in Vodafone India in April this year for Rs 8,900 crore ($1.48 billion). Piramal had acquired the stake in Vodafone’s local arm for Rs 5,864 crore in two tranches during 2011-12.
(Edited by Joby Puthuparampil Johnson)