Shriram Capital Ltd., an Indian financial services company, is nearing a deal to merge with its two publicly traded shadow lending arms as it seeks to fold its offerings into a single entity, people familiar with the matter said.

Unlisted Shriram Capital is in the process of firming up the amalgamation with Shriram Transport Finance Co. and Shriram City Union Finance Ltd. after working on the deal for at least three years, the people said. The merged entity would have ₹1.5 tn ($20 billion) of assets under management, they said, asking not to be identified as the information isn’t public.

The group’s insurance business will be kept out of any potential transaction after the central bank objected, one of the people said.

ICICI Securities Ltd. and Morgan Stanley are advising on the merger, which may be announced as soon as the coming weeks, according to the people. No final decision has been reached, and the discussions could still fall apart, they said.

A deal could help investors in Shriram Capital, including billionaire Ajay Piramal and private equity firm TPG Capital, to cash out.

Shriram Transport is a financier of new and pre-owned trucks, while Shriram City Union funds purchases of consumer goods and motorcycles.

Representatives for Morgan Stanley and ICICI Securities declined to comment. If Shriram Group decides to restructure its holdings and operations at any stage, it will formally communicate to all stakeholders, a company spokesman said.  

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