Piramal Enterprises to Sell Stake in Shriram Finance via Block Deal
Piramal Enterprises, a leading company, is reportedly making preparations to sell its entire stake of 8.34% in Shriram Finance via a block deal, as per recent reports. This move signifies a significant development in the financial sector.
According to sources, Piramal intends to offload approximately 3.1 crore shares at a price of Rs 1,483 per unit, representing a 5% discount from the current market levels. This decision comes in the wake of a similar transaction involving private equity firm TPG Investments, which divested its complete stake in Shriram Finance.
TPG India Investments successfully sold about 99.18 lakh shares, equivalent to a 2.64% stake in Shriram Finance. The shares were sold at a weighted average price of Rs 1,401 per unit, resulting in proceeds of Rs 1,389 crore for the private equity firm. Prominent buyers included Morgan Stanley, Bajaj Allianz Life Insurance, ABSL MF, and DSP MF.
Shriram Finance is a company primarily owned by the public, with a 74.49% stake, while the remaining 25.51% is held by promoters. Mutual funds hold approximately 6.04% of the stake, and foreign investors possess around 44.33%.
The company specializes in providing consumer finance services, which encompass automobile loans, commercial vehicle loans, business loans, and gold loans. Shriram Finance was established through the merger of Shriram City Union Finance and Shriram Capital into Shriram Transport Finance.
Technical experts have analyzed the stock’s performance and observed a potential trend reversal pattern. The stock seems to have formed a Doji pattern slightly below its previous supply zone of Rs 1,510-1,535.
Jatin Gohil, Technical and Derivative Research Analyst at Reliance Securities, explained, “Historically, the stock has experienced a downward reversal after testing this zone, subsequently retracing towards its long-term moving averages. Key technical indicators have also exhibited fluctuations in the overbought zone.”
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Gohil further suggested, “Based on the current setup, it is possible that history might repeat itself, potentially causing the stock to approach its long-term moving averages (100-day and 200-day SMAs) positioned between Rs 1,310 and 1,298. Nevertheless, a decisive breakthrough above the supply zone could break the pattern and support a substantial surge towards the range of Rs 1,650-1,700.”
By carefully considering the technical analysis and the impending stake sale by Piramal Enterprises, market participants and investors can make informed decisions about their investment strategies in relation to Shriram Finance.
About Piramal Enterprises:
Piramal Enterprises Ltd. (PEL) is a prominent and diversified Non-Banking Financial Company (NBFC) that is registered with the Reserve Bank of India (RBI). It operates in various sectors, including retail lending, wholesale lending, and fund-based platforms.
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