Shriram AMC To Sell Significant Minority Stake to Mission 1 of US, Seeking To Expand Business

February 03, 2022
Shriram AMC To Sell Significant Minority Stake to Mission 1 of US, Seeking To Expand Business

US-based Mission 1 Investments LLC is set to buy a significant minority stake in Shriram Asset Management Company Limited (Shriram AMC), infusing funds into the money manager to help it expand its range of products.

At a meeting held on February 2, the board of Shriram AMC approved the strategic investment by Mission 1 Investments, which will hold a 23 percent stake in the company after the transaction is completed, a statement by the former said.

Mission 1 Investments will subscribe to compulsorily convertible debentures (CCDs) and warrants within 18 months at a conversion price of Rs 124.30 per share, a premium of 24 percent over Tuesday’s closing price. The statement did not disclose the total value of the deal, but a company source put it at Rs 35 crore.

Shriram Credit Company Ltd, the promoter of Shriram AMC, will invest a further Rs 50 crore into the business by way of compulsorily convertible preference shares (CCPs) at the same conversion price of Rs 124.30 each. The transaction is subject to approval by the Securities and Exchange Board of India (SEBI), the market regulator.

Shriram Credit currently owns 68.67 percent of the paid-up capital of Shriram AMC. This will drop to 62.55 percent post-conversion. Upon completion of the transaction, Mission 1 Investments will hold 23 percent and the remaining will be owned by the public.

“This partnership sharpens Shriram Group’s focus and attention towards building an investment solutions platform that is truly focused on empowering the end consumer – both retail and institutional,” the Shriram AMC statement said.

Mission 1 Investments is an impact-focused investment partnership with the dual mission of democratizing access to investments and wealth creation, as well as generating strong financial returns for its partners.

Mission 1’s owners include veteran investors Gaurav Patankar, Amit Rajpal, and Eric Wetlaufer, among other partners. Together, the team has 120+ years of executive and investment experience across global markets.

“Successful investing and wealth creation should not be an exclusive preserve of the Top 1 percent of society and by investing in Shriram Asset Management Company, we hope to help level the field via a new-age client-centric platform that can create scalable, customizable, and low-friction investment solutions,” Patankar and Wetlaufer said.

Shriram AMC will now focus on tailoring transparent, thematic investment solutions to end-users, combining mathematical models and human insights.

The company appointed R. Vaidyanathan, a retired member of the faculty at the Indian Institute of Management-Bangalore, as its chairman.

The AMC said 10 percent of its equity would be set aside for employee stock options, with an additional provision of 10 percent at a future date.

“The Shriram Group is fully committed to reinvigorating the mutual fund business. Towards this, we are bringing investors who are growth conscious and aligned with the group’s passion for responsible growth and impact at the bottom of the pyramid,” said Akhilesh Singh, vice-chairman of Shriram Credit Company.

“Going forward, we will launch solutions leveraging our deep tech architecture, our connection with customers, and a creative product-set focused on value creation for the common investor,” Singh added.

Shriram Group is one of India’s leading financial services firms with a presence in commercial vehicle financing, retail financing, chit funds, equipment financing, housing finance, life insurance, general insurance, stockbroking, and wealth advisory services with a total client base of 20+ million customers.