Bain Capital, Advent International, CVC Capital Compete For Shriram Housing Finance Acquisition, Says Report

Private equity funds such as Bain Capital along with Advent International, and CVC Capital are vying to acquire Shriram Housing Finance Ltd (SHFL), a subsidiary firm of Shriram Finance, a non-banking finance company (NBFC) headquartered in Chennai.

After the submission of non-binding bids by prospective buyers last year, Bain Capital, Advent International, CVC Capital, and Warburg Pincus have been shortlisted. As per a report by the Economic Times, they are presently undertaking due diligence, with binding bids expected within the next two weeks.

Shriram Finance, primarily engaged in commercial vehicle financing, holds an 84.82 per cent stake in SHFL. The majority of the remaining shares are owned by Valiant Capital Management, a private equity firm based in San Francisco. Shriram Finance specializes in commercial vehicle financing.

According to sources cited in the report, the financial company is estimating a business valuation of Rs 6,500 crore, which includes a control premium. However, initial offers have fallen within the range of Rs 5,000-5,500 crore.

Late last year, the NBFC had revived talks for a stake sale, and enlisted Avendus, Barclays, and JM Financial as advisors. Shriram and Valiant may retain a minor ownership interest, but the acquirer will assume the role of controlling shareholder and manage the company.

The NBFC aims to prioritize newer financial products and digital ventures. The group has entered the asset reconstruction segment as well with an unsuccessful attempt to acquire Blackstone’s ARC.

It also introduced Shriram One, a financial super app offering diversified services in digital money transfer, insurance, lending and other instruments.