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Valiant Capital To Invest In Shriram Housing Finance

29 March, 2012

Shriram Housing Finance Ltd, the subsidiary of the private equity-backed Shriram City Union Finance, has raised PE funding from US-based Valiant Capital Partners. However, the financial details of the transaction could not be immediately ascertained.

Shriram City said in a filing that its board had approved the investment through subscription of equity shares by Valiant Mauritius Partners FDI Ltd.

The company has received a licence from National Housing Bank to start operations in August last year and has been scouting for an investor since. Earlier reports suggest that it plans to sell 20-25 per cent stake for Rs 60-75 crore.

Shriram Housing Finance is reportedly targeting tier II and tier III markets in Tamil Nadu, Andhra Pradesh, Karnataka, Maharashtra and Gujarat, with loan disbursal of Rs 10 crore this year.

Shares of Shriram City Union Finance closed at Rs 620 a unit, up 1.29 per cent on Thursday in a Mumbai market down 0.37 per cent.

For Q3 FY12, Shriram City reported 57 per cent increase in income to Rs 537 crore with profit after tax rising 42 per cent to Rs 83 crore year on year.

Registered as a deposit-taking NBFC, it offers finance for new and used two-wheelers, three-wheelers and four-wheelers, and also provides personal loan, small business loan and loan against gold. The company has Rs 11,557 crore in assets under management, of which loans against portfolio account for one-third while a quarter each accounts for auto loan and small enterprise financing.

Currently, it has 1,000 outlets across the country, which will be surely leveraged by Shriram Housing Finance during its expansion.

PEs like ChrysCapital, Asiabridge, ICICI Venture, Bessemer Venture Partners and Norwest Venture Partners are direct investors into Shriram City Union Finance and collectively hold over 35 per cent stake in the company. TPG Capital has also invested in various group holding companies like Shriram Capital, and directly in companies like Shriram Properties.

Other group companies backed by private equity investors include Orient Green Power, Shriram EPC and Shriram CCL, among others.

L&T Finance Holdings has recently forayed into housing finance with acquisition of Indo Pacific Housing Finance Ltd, thus joining other entrants like Edelweiss Capital and Religare Enterprises.


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Valiant Capital To Invest In Shriram Housing Finance

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