Piramal Enterprises has announced its decision to divest its entire 20% stake in Shriram Investment Holdings Private Limited to Shriram Ownership Trust for a sum of Rs 1,440 crore. The transaction is slated to be finalized by the end of the current financial year, pending regulatory approvals.
The strategic move aligns with Piramal Enterprises’ ongoing commitment to streamline its portfolio by monetizing non-core assets. In a filing with the exchanges on January 27, Piramal Enterprises emphasized that the proceeds from the stake sale will contribute to strengthening its balance sheet.
For the fiscal year ending March 31, 2023, the contribution of Shriram Investment Holdings Private Limited to the revenue of Piramal Enterprises was reported as nil, according to the company’s exchange filing.
The transaction will be executed through a share purchase agreement and is contingent on the necessary regulatory approvals by Shriram Ownership Trust, the acquiring entity. Piramal Enterprises clarified that Shriram Ownership Trust is not affiliated with any of its promoters, promoter groups, or associated companies. Therefore, the transaction does not fall within the purview of related party transactions.
It is noteworthy that Shriram Ownership Trust serves as the promoter of Shriram Capital Private Limited, which, in turn, acts as the overarching holding company for the Shriram Group.
This development follows Piramal Enterprises’ divestment of its entire stake in Shriram Finance in June 2023. The block deal, amounting to approximately Rs 4,823 crore, involved the offloading of 3.12 crore shares, representing an 8.34% stake in the company, as indicated by data available from stock exchanges.
Piramal Enterprises continues to strategically realign its investments and focus on core business operations, emphasizing financial prudence and portfolio optimization. The company remains optimistic about the positive impact of these measures on its overall financial health and future growth prospects.