Global buyout giant Texas Pacific Group or TPG is picking up a 49% stake in Shriram Retail Holdings Pvt Ltd for $120 million (Rs 530 crores). Shriram Retail is the holding company for Shriram City Union Finance, the consumer lending arm of the Chennai-based group. So the investment will give TPG indirectly 26.7% stake in Shriram City Union Finance excluding the shares in the open offer.
TPG would make an open offer for a further 20 per cent of the equity in Shriram City Union Finance, a publicly listed company. The investment is subject to approval of the FIPB and other regulatory agencies. This would be TPG's biggest deal in India, which has just raised $30 billion globally in fresh funds.
The investment has been done through TPG India Investments I, Inc. In 2005, Newbridge Capital had invested invest $100 million (around Rs 450 crore) in the three companies of Shriram group - Shriram Investments, Shriram Transport Finance Company and Shriram Overseas Finance. Later Newbridge was merged with TPG's Asia operations. Also earlier this year Shriram City Union had raised Rs 400 crore Bessemer Venture Partners, ICICI Venture and ChrysCapital.
TPG was advised by DSP Merrill Lynch Limited and J. Sagar Associates and the Shriram Group was advised by Kanga & Co.