Shriram Finance surges 6% post large block deal; TPG India likely seller

Shares of Shriram Finance surged over 6 percent in early trade on June 19 after a large block deal took place on the exchanges.

Around 99.2 lakh shares or a 2.65 percent stake in the company changed hands on the exchanges in the block deal window at Rs 1,401.15 per share. The total deal value was at Rs 1,390 crore.

Even though Moneycontrol could not immediately identify the parties involved in the transaction, CNBC-Awaaz reported that PE fund TPG India was the likely seller in this deal.

If the news is indeed true, then TPG India Investments Fund has offloaded its entire 2.65 percent stake in the company.

At 09.41 am, shares of Shriram Finance were trading at Rs 1,472.90, up 5.1 percent on the National Stock Exchange. The stock also hit an intraday high of Rs 1,500.90.

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The block deal also triggered a spurt in volumes as one crore shares changed hands on the exchanges, as against the one-month daily traded average of eight lakh shares.

In the January-March quarter, the company recorded a consolidated net profit of Rs 1,288 crore, up 18 percent higher as against Rs 1,091 crore reported in the year-ago period. For FY23, the company’s profit came at Rs 6,020 crore, reflecting a steep surge of 122 percent as against Rs 2,721 crore clocked in FY22.

Brokerage firm YES Securities believes the current valuation of Shriram Finance is undemanding on its FY25 estimates and could make a good case for a re-rating on sustenance of current AUM (Assets Under Management) growth rate and improvement in asset quality.

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