Shriram Finance, Piramal Enterprises zoom 10% after huge block deals

Shares of Shriram Finance hit a fresh 52-week high of Rs 1,715, and was frozen temporarily at the 10 per cent upper circuit on the National Stock Exchange (NSE) in Wednesday’s trade at 09:19 AM; after over 8 per cent of total equity of the non-banking finance company (NBFC) changed hands on the exchange.

Around 31.22 million shares representing 8.3 per cent of total equity of Shriram Finance worth of Rs 4,824 crore changed hands on the NSE, the exchange data shows. The names of the buyers and sellers were not ascertained immediately.

According to media reports, Piramal Enterprises (PEL) was planning to sell its entire 8.34 per cent stake in the company via block deals on Wednesday. About 31 million shares worth Rs 4,832 crore were to be offered by the company to institutional investors, per a term sheet. Floor price of the deal was likely to be at Rs 1,483 per share.

Meanwhile, shares of Piramal Enterprises too were locked in temporary 10 per cent upper circuit at Rs 922.35 on the NSE. Both these stocks are traded in the futures & option (F&O) segment, which has no circuit limits.

Earlier, TPG, an American alternative asset manager, had sold its entire 9.91 million or 2.65 per cent stake in Shriram Finance through block deals for Rs 1,400 crore on the BSE on Monday. In past three trading days, the stock has rallied 22 per cent.

Exit of Piramal Enterprises will put an end to the overhang on Shriram Finance stock and pave way for re-rating of the stock amid improving business growth and relatively attractive valuation, ICICI Securities said in a note.

Shriram Finance is the flagship company of the Shriram group which has significant presence in Consumer Finance, Life Insurance, General Insurance, Housing Finance, Stock Broking and Distribution businesses.

Shriram Finance is India’s largest retail asset financing NBFC, with Assets under Management (AUM) of Rs 1.85 trillion. Shriram City Union Finance and Shriram Capital were amalgamated with Shriram Transport Finance Company and the name of Shriram Transport Finance Company has been changed to Shriram Finance effective November 30, 2022.

Shriram Finance is India’s largest retail asset financing NBFC, with Assets under Management (AUM) of Rs 1.85 trillion. Shriram City Union Finance and Shriram Capital were amalgamated with Shriram Transport Finance Company and the name of Shriram Transport Finance Company has been changed to Shriram Finance effective November 30, 2022.