Grapevine: PE firms circle Shriram Capital; Singtel may raise stake in Bharti Telecom
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Private equity funds Advent International, Blackstone Group, CVC Capital, Carlyle Group and Brookfield are in the race to buy close to 30% stake in Shriram Capital, three people familiar with the development told The Economic Times.

Shriram Capital is the holding company of the financial services and insurance companies of the Shriram Group, led by Ramamurthy Thyagarajan.

In June, VCCircle reported that existing investors Piramal Enterprises and TPG Capital seek to exit the Chennai-based financial services firm.

The people mentioned above said that TPG and Piramal’s combined holding worth around Rs 6,000 crore will likely value Shriram at up to Rs 20,000 crore. The investors have submitted initial bids.

In 2014, Mumbai-based Piramal Group bought a 20% stake in Shriram Capital for Rs 2,014 crore.

TPG Capital is a decade-long backer of Shriram Capital and holds a nine per cent stake in the company.

Meanwhile, Singapore firm Singtel, which currently owns 48% stake in Bharti Telecom, is likely to raise its stake to beyond 50% resulting in the company becoming a foreign-owned entity, The Economic Times reported.

At present, Bharti Telecom’s 41% stake in Bharti Airtel is classified as domestic shareholding as it is majority owned by the Sunil Mittal family (52% stake).

According to a Bharti spokesperson, Bharti Telecom planned to seek investments from its promoter entities and Singtel to reduce its debt.

Persons in the know said the company had a debt of about Rs 4,500 crore as of March 31, 2019 and it has raised over Rs 3,000 crore through bond sales to invest in Bharti Airtel’s Rs 25,000 crore rights issue.

Once it is majority owned by Singtel, Bharti Telecom’s stake in Bharti Airtel will be considered foreign equity. As a result, foreign shareholding in Bharti Airtel, which currently stands at 43%, could rise to 85.07%. To make the proposed changes compliant with foreign direct investment norms, Bharti Airtel last month sought government nod to increase foreign shareholding to 100%, the report said.

Existing rules allow 49% foreign investment under the automatic route, and anything between 50% and 100% needs to be cleared by the government.

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