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Piramal Buys 10% Stake In Shriram Transport

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US private equity firm TPG Capital raised about $300 million by selling its roughly 10 per cent stake in Indian commercial vehicle financier Shriram Transport Finance to Piramal Group, generating a near seven times return on a 2006 investment.

Piramal Enterprises said it bought a 10 per cent stake in Shriram Transport through a block deal for about 16.52 billion Indian rupees, or 723 per share. Ajay Piramal, chairman of Piramal Enterprises, told reporters the stake was bought from TPG.

TPG, which manages about $55 billion globally, invested a little more than $100 million in Shriram Transport's parent company, Shriram Group, in 2005. A year later it took a 20 per cent stake in Shriram Transport against its investment in Shriram Group, valued at 113 rupees per share, according to a source with direct knowledge of the matter.

TPG declined to comment. In February, TPG sold half its stake in Shriram Transport to a clutch of institutional investors and raised about $305 million.

Piramal is primarily engaged in the pharmaceutical industry and has interests in financial services and manages a property fund. Shares in Shriram Transport were up as much as 5.7 per cent, to Rs 776.50, after the deal. UBS advised Piramal on the deal.

Piramal Looking To Exit Vodafone Investment
Piramal Enterprises is looking to exit next year its investment in Vodafone Group Plc's local mobile phone unit, the drugmaker's chairman Ajay Piramal said. Piramal owns an 11 per cent stake in Vodafone India, which is the country's second-biggest phone carrier. Piramal had bought the stake in two stages for a total of about Rs 5,900 crore.

Vodafone has the first right to buy the stake from Piramal if a planned listing of the phone unit does not happen within 18 months, Piramal said in February last year. Piramal had said the company expected an annual return of up to 20 per cent from the investment.