The stock of a prominent retail NBFC experienced a 5% surge to reach ₹2,419 per share on Tuesday, following the board’s approval to divest its entire stake in its housing subsidiary for ₹4,630 crores.
At 12:05 a.m., Shriram Finance Ltd shares were trading at ₹2,338.50 per share, up 1.63% on the National Stock Exchange from the previous close price. The company has a market capitalization of ₹87,986 crore.
The board of Shriram Finance Ltd has given approval for the complete divestment of its shareholding in Shriram Housing Finance Limited (SHFL) to Warburg Pincus. Through its affiliate Mango Crest Investment Ltd.
Warburg Pincus will become the sole owner of SHFL, subject to regulatory clearance. For a transaction, valued at ₹ 4,630 crore for equity and convertible instruments of SHFL,
Shriram Finance Ltd maintains a controlling interest in SHFL, with the remaining shares held by private-equity firm Valiant Partners LP (Valiant), based in Mauritius. In an upcoming transaction, Valiant will transfer its equity stake to Warburg Pincus.
Shriram Finance Ltd, a prominent Non-Banking Financial Company (NBFC) in India, specializes in various financial services, including commercial and passenger vehicle finance, SME finance, and retail lending such as personal loans, gold loans, and two-wheeler loans.
Meanwhile, the company witnessed a notable surge in revenue, marking a 24 percent year-on-year increase, from ₹7,966 crore in Q4FY23 to ₹9,904 crore in Q4FY24. Concurrently, there was a substantial 56 percent rise in net profit during this period, climbing from ₹1,288 crore to ₹2,021 crore.
Over the past six months, Shriram Finance Ltd shares have experienced a 15% increase, while over the last 12 months, they have surged by 75%.
Morgan Stanley has maintained an ‘overweight’ rating on the Shriram Finance stock with a target of ₹ 3,050, with an upside of 31% from Tuesday’s trading price.
Written by Omkar Chitnis
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