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Investors exiting company a part of business cycle: Shriram City Union Finance on TPG's stake sale

Updated : July 01, 2019 11:19 AM IST

Shriram City Union Finance on Monday said that TPG deciding to sell its stake in the company was a part of the business cycle and nothing more than that.

Piramal Enterprises, as well as TPG, decided to exit Shriram Capital. A restructuring of group entities is likely on the cards.

“Shriram Capital has already put out a press note earlier that TPG is looking to exit. They have been with us for close to eight years and it is natural that they exit. Their horizon of investment cycle has come to close, so there is nothing extraordinary or new in it, it is just nature of their investment that they exit,” said S Chakravarti, MD and CEO, Shriram City Union Finance.

On Piramal Enterprises' exit, he said the only issue remains to be the challenge of finding suitors for the stake and modalities.

Talking about financials of the Shriram City Union Finance, he said the company has raised about Rs 2700 crore in the first quarter. However, if one were to compare the first quarter of last year to this year, there is a tightening of liquidity.

“We do plan to hit the debt market again in July and are also planning to issues some overseas bond issues and also have a pipeline of close to Rs 4000 crore proposals with the banks. So not overly concerned about liquidity,” he said.

The company is committed to 18 percent asset under management growth in FY20, he said, adding that there could be a 10-15 basis points compression in net interest margins to the current 12.7 percent.

Going forward the emphasis would be more on small business finance and not seeing any delinquency issues in that market.
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