UPDATE 1-TPG sells stake in India's Shriram Transport for $300 mln

MUMBAI Fri May 10, 2013 3:28am EDT

MUMBAI May 10 (Reuters) - U.S. private equity firm TPG Capital raised about $300 million by selling its roughly 10 percent stake in Indian commercial vehicle financier Shriram Transport Finance Co Ltd to India's Piramal Group, generating a near seven times return on a 2006 investment.

Piramal Enterprises said it bought a 10 percent stake in Shriram Transport through a block deal for about 16.52 billion Indian rupees ($305.21 million), 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 percent 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 percent, to 776.50 rupees, after the deal.

UBS advised Piramal on the deal.

($1 = 54.1275 Indian rupees)

(Reporting by Indulal PM; Editing by Matt Driskill)

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