Private equity major ChrysCapital and ICICI Venture are looking to book profits on their investments in Chennai-based Shriram City Union Finance as both shareholders made partial exits on Wednesday. The two shareholders sold a combined stake of 5.55 per cent for over Rs 220 crore on the exchanges.
According to VCCircle estimates, ChrysCapital could be making 3x-4x on its investment while ICICI Venture would make approximately 2x, without counting the dividends. Other private equity investors in Shriram City Union include TPG Capital, Norwest Venture Partners and Bessemer Venture Partners.
ChrysCapital, which held 12.64 per cent in Shriram City Union, sold a third or 4.3 per cent stake for Rs 172 crore. Most of its stake was acquired by Bank of Muscat India Fund. ICICI Venture, which held 7.06 per cent stake, sold approximately 1.25 per cent stake for Rs 50 crore and it was picked up by Sundaram Mutual Fund.
Shares of Shriram City Union closed at Rs 750.05 a unit, down 2.58 per cent on the BSE. Both funds sold their holdings at Rs 750 per share. The share price of Shriram City Union, which specialises in small ticket retail finance, hit a 52-week high last week and reached Rs 795.
The firm has recently launched a Rs 500 crore non-convertible debenture (NCD) issue.
For Q1 FY13, Shriram City Union reported 57 per cent increase in total income to Rs 674 crore with profit after tax rising 29 per cent to Rs 103 crore on a year-on-year basis. The assets under management jumped 69 per cent to Rs 14,889 crore, with 40 per cent on loans against gold and another 30 per cent in small enterprise financing. The remaining portfolio is distributed among auto loans, two-wheelers, consumer durables and personal loans.
“Shriram City Union Finance follows a unique and sound business model with presence in the high-yielding, high growth, small ticket retail finance segment (consumer durable finance, auto loans, personal loans, business finance and retail gold loans), and superior sustainable RoEs of 20 per cent plus,” said an Edelweiss Capital report on the firm.
(Edited by Sanghamitra Mandal)