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| Shriram Transport to raise Rs 1,000 cr in NCD issue |
| BS Reporter / Chennai May 14, 2009, 00:30 IST |
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 Chennai-based commercial vehicle financier Shriram Transport Finance Company will raise Rs 1,000 crore through a secured, redeemable non-convertible debenture (NCD) issue.
The company is also planning to set up a subsidiary for equipment finance with a proposed capital of around Rs 150 crore.
R Sridhar, managing director, Shriram Transport Finance, said that the new company would start operations in the next three months from 470 locations across the country.
Sridhar said the company would cater to small and medium contractors in the construction industry before diversifying into other segments. He noted that both used and new equipments will be provided finance.
Meanwhile, the company, which is a part of the Chennai-based Shriram group, has reported a 35.67 per cent growth in its net profit in the quarter ended March 31, 2009 at Rs 153.8 crore, compared with Rs 111.8 crore during the same quarter last year.
Total income for the quarter stood at Rs 995 crore as against Rs 768 crore in the corresponding quarter last year, while the total expenditure stood at Rs 242.7 crore as against Rs 208.7 crore in the same quarter last year.
The company’s board has recommended a dividend of Rs 4 per equity share for the financial year 2008-09, which is in addition to the interim dividend of Re 1 per equity share already paid.
Sridhar said gross non-performing loans (NPLs) increased to 2.14 per cent, compared with 1.74 per cent in September because of market conditions. However, he felt things would improve as the increase in NPLs was only marginal.
Sridhar said 85 per cent of the company’s loans were to the small truck owners who operate in the rural and semi-urban areas. This segment had not been impacted as much as the medium and big truck segment.
Asked whether this was a high risk area, Sridhar said small truck owners paid 30-40 per cent of the money upfront and hence the default rates were generally low. Around 60-70 per cent of the customers paid on time and the balance took six more months than their schedule.
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