Thursday, May 9, 2013

Piramal Group buys TPG\'s entire 9.9% stake in Shriram Transport Finance

10 May, 2013,NEW DELHI:-

Diversified conglomerate Piramal Group has picked up US-based private equity investor TPG\'s 9.9 per cent stake in Shriram Transport Finance in the open market via block deals, according to ET Now sources.

Shares of Shriram Transport Finance Company BSE 5.03 % rallied over 5 per cent in intraday trade soon after ET Now broke the news.

At 11:00 am, Shriram Transport was trading 5 per cent higher at Rs 771.20. The stock hit a low of Rs 723 and a high of Rs 775.00 in trade today.

Piramal Group bought 2.28 cr shares of Shriram Transport Finance Company at a price of Rs 723 per share in a block deal. Piramal group will pay Rs 1,652 crore to buy the TPG stake.

Piramal had earlier announced its interest in financial services business. Shriram Transport is India\'s largest player in commercial vehicle finance with niche presence in financing pre-owned and small truck owners.

Ajay Piramal, chairman of Piramal Enterprises said, \"Acquisition of this stake in Shriram Transport is in line with our strategy for building our presence in financial services sector and we see long term shareholder value creation from this stake acquisition.\"

\"Piramal Group has always been famous for its deals in the past and this one is no exception. The group is pinning hopes on Shriram which might get banking licence,\" said A K Prabhakar, Senior Vice President - Equity Research at Anand Rathi.

\"The deal is indeed positive for Shriram Transport and if the company does get a banking licence, the stock can almost double from current levels,\" he added.

UBS was the sole broker to the Shriram Transport Finance Company deal.

Earlier in the week, Shriram Transport Finance Company reported a 15 per cent rise in net profit to Rs 355 crore for the March quarter on a standalone basis.

Stock Recommendations:

Tracking the momentum, Ashwani Gujral of recommends investors to buy the stock for a target of Rs 790, keeping stop loss at Rs 750.

While Sandeep Wagle, founder & MD, APTART Technical Advisory Services puts a long term target of Rs 815 on the stock.
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