Shriram Capital eyes inorganic route for growth

With Ajay Piramal on board as an investor, financial services company Shriram Capital is looking at a possible shift in strategy in favour of more acquisitions to expand its businesses, a top group official has said.

As a group, Shriram had a "hand-to-mouth" existence when it came to capital, and depended for internal accruals and money from private equity funds for growth, its group director G S Sundararajan said.

"With the investment from the Piramals, our outlook and approach to growth and exploring new horizons will change. We will be more open for acquisitions," he told PTI.

He, however, stressed that as a group, Shriram Capital is never "enamoured" by inorganic growth opportunities and this philosophy will continue.

Among its businesses, Sundararajan hinted the housing finance arm, under Shriram City Union Finance, is looking for high growth opportunities and may scout for possible acquisition targets in order to grow the book and presence.

"Any business which is not large enough is a very good opportunity and we may look at such offerings," he said, without giving any further details on the strategy.

Apart from the acquisitions, Shriram will also focus on entering newer businesses which may be aligned to the current ones, he said.

Earlier this month, Piramal picked up 20 per cent stake in Shriram Capital for Rs 2,014 crore, the holding company housing the transport, small business, gold, housing finance businesses as also the insurance verticals.

Gradually, the plan is to have Shriram, Piramal and South African Group Sanlam as equal partners in the venture.

Sundararajan said this depends on how private equity firm TPG sells its stake in the holding company, but did not give any timelines for the same.

"Shriram has a history of building business and scaling them up, in Sanlam we have a strategic partner of global repute, while getting Piramal on board helps the company have a entrepreneur of repute," he said.

While Shriram will continue the day-to-day management of the businesses, Piramal will engage more at the board level, Sundararajan said, asserting that there will not be any change in the management of the businesses.

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