The Hindu Business Line : ChrysCap to invest in Shriram group cos

CHRYSCAPITAL III LLC, Mauritius, is likely to pick up a 20.6-per cent stake each in three Shriram group companies — Shriram Investments, Shriram Transport Finance and Shriram Overseas Finance. All three are non-banking finance companies, predominantly into commercial vehicles financing.

The private equity fund will be allotted shares at a Rs 25-premium in Shriram Investments and Shriram Transport, and at a premium of Rs 11 in Shriram Overseas. In all, ChrysCapital will invest Rs 100 crore in the group.

In addition, ChrysCapital will also be given an option to subscribe to an additional 4.34 per cent of equity in Shriram Investments and Shriram Transport. The warrants that will be issued for this purpose could be converted into shares within the next 18 months.

The 4.34-per cent stake will cost ChrysCapital an additional Rs 20 crore.

ChrysCapital is the eighth major investor to pick up stake in Shriram Investments and Shriram Transport.

Earlier, City Union Bank, Ashok Leyland, Telco, Citicorp Finance, UTI Bank, Reliance Capital and the Dutch development financial institution, FMO, had invested in the equity of these companies.

The issue of shares to ChrysCapital will be through a preferential allotment. ChrysCapital will also come out with a mandatory open offer to acquire up to 20 per cent of the companies' equity, for the same price as they bought the shares from the group.

The Chairman of the Shriram group, Mr R. Thyagarajan, said the truck financing companies of the group do a combined business of Rs 6,000 crore.

Any takers for Rs 1,000 crore?

CHRYSCAPITAL, a US-based private equity funding company, "has Rs 1,000 crore of unutilised capital" ready for investing. The venture fund company, which has been active in India in the last five years, has picked up equity stakes in 10 Indian entities excluding the one announced on Wednesday: three companies of the Chennai-based Shriram Group. These are Core3 (a BPO company), Global Vantedge, Gammon India, IVRCL, Mphasis BFL, NewPathVentures (which is into semiconductor chip design services), NIIT, Suzlon, TechTeam (BPO) and Yes Bank.

In all these, ChrysCapital has put in a little over Rs 1,100 crore. Now, there is a Rs 1,000 crore more.

Mr Ashish Dhawan of ChrysCapital told Business Line that the company was looking at investment opportunities in the auto components sector.

Speaking of ChrysCapital's style of functioning, Mr Dhawan said that while the company would seek board positions in the investee companies, it would never interfere with the management.

Admitting that "what we are doing now is growth capital," he said ChrysCapital would be interested in pure venture funding too.

ChrysCapital's $450-million corpus has been formed with investments from "prestigious institutional investors, founders of many premier technology firms in the US, CEOs of multinational firms, and partners of several top-tier global private equity firms."

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