Case Name :      Shriram Transport Finance

Authors :           Gennaro Bernile, Anand Shankar, Rahul Rajani

Source :              Ivey Publishing

Case ID :           9B16N051 / W16533

Discipline :        Finance

Case Length :    12 pages

Plagiarism : NO (100% Original work)

In December 2012, the stock of Shriram Transport Finance Company (STFC) had just breached the ₹750 mark, signifying an appreciation of close to 80 per cent for the calendar year of 2012. Texas Pacific Group (TPG), the global private equity firm, had invested in STFC at a time when the share price was hovering around ₹100. As was the case with most private equity firms, a successful exit from an investment was of paramount importance for TPG in order to reap handsome returns. In the course of charting the exit path from an investment, private equity firms had to consider several critical issues including exit structure, timeline for exit, and regulatory hurdles. There were three usual choices of exit routes: initial public offering, trade sale, or secondary sale. Each of the exit routes had its own advantages and disadvantages. Was this the right time for TPG to exit STFC? If yes, which option should TPG pursue?