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Duggal may be chairman of Shriram Group Companies, again

Shriram Capital is the holding company for the financial services and insurance entities of the Shriram Group.

, ET Bureau|
Last Updated: Dec 09, 2019, 07.59 AM IST|Original: Dec 09, 2019, 07.59 AM IST
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Within the Shriram Group, there is an exercise on wherein Shriram Transport Finance and Shriram City Union are getting merged with Shriram Capital.
Mumbai: Arun Duggal is likely to take over as chairman of the Shriram Group entities after Ajay Piramal stepped down from the position selling his stake in Shriram Transport Finance. Duggal will oversee the proposed three-way merger of Shriram Transport Finance, Shriram City Union and Shriram Capital.

A plan to merge two of its publicly traded entities, Shriram Transport Finance Co and Shriram City Union Finance, with the unlisted parent Shriram Capital is underway. This is being done to simplify the corporate structure and facilitate the exit for existing investors such as TPG Capital and Piramal Enterprises.

Shriram Capital is the holding company for the financial services and insurance entities of the Shriram Group. The holding company includes Shriram City Union, Shriram Transport Finance, two insurance companies-Shriram Life and Shriram General — a retail broking and financial distribution businesses.

“There is talk of getting Arun Duggal back as chairman after Ajay Piramal quit recently,” said a source. “He will oversee the business at a time when the NBFC sector is undergoing pain in terms of liquidity squeeze.”

Arun Duggal was the chairman of the board of Shriram Capital, Shriram Transport Finance Company, Shriram City Union Finance and other Shriram Group companies for a decade. He stepped down after Piramal became chairman in 2014. Duggal has been associated with Shriram Group since November 2003. He is a banker with 34 years experience. He was with the Bank of America for 26 years and India CEO from 1998 to 2001.

Piramal has been scouting for a buyer for the Shriram stakes to raise liquidity for his financial services businesses, which have been hit by concerns of exposure to weakened corporate lenders and real estate developers. Piramal Enterprises sold 10% in Shriram Transport Finance for Rs 2,300 crore some months ago. But plans to exit Shriram Capital have not yet borne fruit even though it ran a formal process along with TPG through JP Morgan and Morgan Stanley to find buyers for their combined 30 per cent stake.

Within the Shriram Group, there is an exercise on wherein Shriram Transport Finance and Shriram City Union are getting merged with Shriram Capital.

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