In the largest deal within the affordable housing finance sector, Shriram Finance’s board greenlit the sale of its housing finance arm, Shriram Housing Finance (SHFL), to Warburg Pincus for Rs 4,630 crore. Warburg Pincus will secure the stake via its affiliate Mango Crest Investment, marking its largest deal in India. The transaction, encompassing equity and convertible instruments, is slated to benefit Shriram Finance with Rs 3,909 crore upfront, along with additional amounts contingent on specific events.
Shriram Finance, holding a controlling stake in SHFL, alongside Valiant Partners LP (Valiant), Mauritius, will divest its equity stake to Warburg Pincus. Post-transaction, SHFL will operate independently, remaining committed to its mission of providing housing finance solutions to underserved segments.
SHFL boasts 155 branches and an asset size of Rs 13,762 crore, with a net worth of Rs 1,924 crore as of March 31. Led by Ravi Subramanian, the company is poised for further growth, aiming to empower millions in owning homes.
Umesh Revankar, Executive Vice-Chairman of Shriram Finance, expressed confidence in SHFL’s potential to unlock greater value and serve the underprivileged. He emphasized the transaction’s role in enhancing value creation for both Shriram Finance and SHFL, aligning with their long-term visions.
Financial advisers including JM Financial, Barclays, and Avendus facilitated the deal, with legal counsel provided by Trilegal, Anagram, and Cyril Amarchand Mangaldas. Narendra Ostawal, Head of India Private Equity at Warburg Pincus, highlighted the firm’s commitment to partnering with exceptional teams in financial services.
Warburg Pincus’s investment portfolio includes prominent financial services firms such as Fusion Microfinance, Home First Finance, and India First Life Insurance, reflecting its deep engagement within the sector.
In 2023, TPG acquired a 99.02% stake in Poonawalla Housing Finance from Poonawalla Fincorp, further underscoring the momentum in India’s housing finance landscape.
