From zone chiefs to staff training: Shriram keeps ball rolling for merger

Appoints PricewaterhouseCoopers to advise on the post-merger integration

From bringing experts in charge of five zones to training employees to give exposure to products, Shriram Group has kicked off the integration process on ground, ahead of its planned mega merger.  

The company has already appointed five joint managing directors (JMD) and also started 50 pilot branches so far to have a look at how the merged entity between Shriram City Union and Shriram Transport will function. The group has appointed PricewaterhouseCoopers to advise on the post-merger integration process.

“Integration process is going on smoothly. We have started the pilot through a few pilot branches through which we do multiple product launches. We have five geographical areas and its leadership in place. They will be overseeing it starting from pilot study to implementation,” said Umesh Revankar, vice-chairman and managing director, Shriram Transport Finance (STFC). Other processes like human resources, system and financial integration are also on track. “By the time the legal date (of merger) is on, we should be totally integrated,” he added.

The five new JMDs are K Srinivas and Gouse Mohiddin Jilani from SCUF and  Nilesh Odedara, Sudarshan B Holla and Sridharan P from STFC. Each of them are part of the group for around 25 to 30 years. The planned super-app called Shriram One — where all lending, savings and insurance products will be available on a single platform — is also a key towards the new integration. Earlier, it was said that the one-time integration cost for the company would be around Rs 200 crore. “It is as per schedule. Both NSE and BSE approval has come. We have now sent the proposal to NCLT. Next process is NCLT calling for shareholders and creditors meeting. We should be on schedule for October or November first week,” Revankar said. 

Gouse Mohiddin Jilani, Executive Director, Shriram City Union Finance Ltd; K Srinivas, Executive Director, Shriram City Union Finance

The company said that system and people integration is underway and progressing well. It already started cross training the staff at the branch level to help them develop expertise in the new products. The strategy is to train all the employees on the diversified portfolio within six months time.

Shriram Transport Finance Company and Shriram City Union Finance both work on a structure where each geographical unit is managed end to end by the leadership in that zone – from sales to collection to profitability and growth. As per the integration roadmap, the similar successful format will be continued in the new entity Shriram Finance too, under the leadership of the five JMDs.

Sudarshan B Holla, Joint Managing Director- Shriram Transport Finance Co Ltd; Nilesh Odedara, Joint Managing Director, Shriram Transport Finance Co

“Each JMD will have his own management, marketing, sales and product teams and so on and will be operated according to local customs and demand. On the ground, each division might look like a standalone business. However, the overall direction of each division is still directed by the central business policy. India is culturally so unique in each geography and this strategy will help us be deeper rooted and have a strong customer connect,” said a source. The structure is effective from April 1, 2022.

“We have started pilot projects in 50 branches spread across Pan-India and have launched all products there. The pilots will help us understand market demand for the products and we will shape our strategy based on each geography,” the source added.

 It was in December that the group announced the merger of Shriram Capital Ltd (SCL) and Shriram City Union Finance Ltd (SCUF) with Shriram Transport Finance Ltd (STFC), to create the largest retail NBFC in India named Shriram Finance Ltd (SFL). This merger would bring together all its lending products — commercial vehicles, two-wheeler loans, gold loans,personal loans, auto loans and small enterprise finance. The new entity could have combined assets under management (AUM) of over Rs 1.5 trillion, more than 20 million consumers and a distribution network of around 3,500.