Chennai: Shriram Group has announced consolidated exercises that will create the largest Retail Financing NBFC in India.
The group headquartered by Chennai said on Monday that the company’s group board has cleaned the restructuring process that will bring all financial businesses under one entity, play the insurance business to a separate entity and thus sharpen the focus on business.
Under the terms of the restructuring, the capital of Shriram, a group of groups that calculate promoters, piracas and TPG as shareholders and Shriram City Union Finance, Retail Group Loans, will be combined into Shriram’s transportation finance.
Shriram transportation which is combined will be renamed as Shriram Finance.
The insurance business will be inhabited and all other businesses will be held separately outside the entities registered.
Based on merger, Shriram Transport will issue 1.55 shares for each Shriram City shares and 0.097 shares for each share of the Capital of Shriram.
The combined entity will have 3,605 branches and more than 50,000 employees and will manage Rs 1.50 lakh crore assets.
Piramal and TPG who contemplate to get out of their ownership of the unregistered parent company will now get the opportunity to hold bets in the registered entity.
The pyramal will now accommodate 8.54% and TPG will accommodate 2.52% in combined entities.
Shriram’s transportation stock price fell 1.1% to close at Rs 1,486 while the city of Shriram flared up 5.7% to Rs 2,140 when the Sensex benchmark fell 0.86%.
DV Ravi, MD from Capital Shriram said that this merger was a great opportunity to strengthen the offerings of consumers and provide a more holistic product basket covering all loan products, the intention was also to create a comprehensive cross-sales program that combines the insurance business, broking and AMC.
, including their depositors.
Umesh Revankar, Deputy Chairperson of the Current Executive and CEO of Shriram Transport Finance will become Deputy Chairperson of the New Shriram Finance Ltd, while YS Chakravarti, MD & CEO of Shriram City, will be the new MD & CEO.
Shriram Finance housing will be a subsidiary of Shriram Finance with holding 85.02% and 44.56% in Shriram Automall India will be held by Shriram Finance.
The merger is subject to the approval of shareholders and other regulatory approval from Sebi, RBI, IRDA and CCI.
ICICI Securities and Morgan Stanley suggested restructuring, while Drishti Desai, Bansi Mehta and Ey followed up on business assessment.
The 46-year-old Shriram Group was founded in 1974 by Ramamurthy Thyagarajan.
This group began in the Chit fund business and then moved to the loan business through Shriram Transport Finance and Shriram City Union.