Mumbai:
Shriram Transport Finance Company Ltd plans to raise an additional 50 billion rupees ($627.20 million) in the second half of the fiscal year to fund growth opportunities.
The non-bank finance company (NBFC) has already raised 50 billion rupees in the first half of this year and the additional funds raised are separate from existing 500 billion rupees refinancing plans, STFC director Umesh Revankar said. Reuters Tuesday.
Most of the fundraising will likely come through non-convertible three-year bonds, he added.
The commercial vehicle financier had announced in December a merger with promoter Shriram Capital and diversified finance company Shriram City Union Finance, which is expected to be completed by the end of October, a month ahead of schedule, Revankar said.
The merged entity would be one of the largest shadow banks in the country, according to analysts.
The fundraising comes at a time when overall credit growth may decline.
“At the start of the fiscal year, we expected credit growth for the merged entity to be around 15%. We expect this to drop to 12% if the rate hike leads to lower demand,” said Revankar.
“At least until October, demand and repayment options appear to be on track. But after further rate hikes, which are expected, could be affected,” he added.
To enhance growth, the NBFC is also looking to expand some of the products in its portfolio. Loans on real estate, which traditionally only applied to businesses, are now also provided for personal purposes.
It also plans to launch invoice financing to meet the short-term financing needs of its customers and expects good growth opportunities from the segment, Revankar said.