This transaction does not alter the overall promoter holding in Shriram Finance, a non-banking finance company (NBFC), which remains at 25.43% as of 31 December 2023. However, the internal distribution of shares has shifted. Shriram Value Services’ stake has increased to 5.5% from 3.46%, while Shriram Ownership Trust’s holding has shrunk to a minimal 0.02% from its previous level of 2.09%.

In the past year, Shriram Finance has delivered an impressive 88% return to investors, significantly outperforming the benchmark Nifty 50’s 29% gain.

The positive momentum continued with investment bank JP Morgan on 28 January upgrading its rating on Shriram Finance to “Overweight,” citing expectations of higher loan growth. The report also forecast increased profitability, with normalized return on equity (ROE) projected at 16%.

JP Morgan further revised its earnings per share (EPS) estimates for fiscal years 2025 and 2026 upwards by 1.9% and 2.0%. The brokerage also raised its price target on the stock to ₹2,850, reflecting its bullish outlook on Shriram Finance’s medium-term loan growth prospects.

This positive outlook comes on the back of increased foreign investor interest in the Indian financial services sector. Foreign inflows into the sector have already reached ₹5,365 crore in the first half of March.

On 20 June 2023, Piramal Enterprises, another major player in the NBFC space, had exited its entire 8.34% stake in Shriram Finance through block deals. The sale fetched an average price of ₹1,545 per share. Similarly, TPG India had offloaded its 2.65% stake for ₹1,390 crore in an open market transaction two days before the Piramal deal.

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Published: 22 Mar 2024, 08:15 PM IST