Shriram Transport Co to enter debt market

Shriram Transport Company (STFC), a non banking finance company (NBFC) plans to hit the debt capital market with issue of non convertible debenture(NCD) aggregating to Rs 1000 crore.

Revealing this Rajeev Garg, general manager (marketing), Shriram Transport Company maintained that the company plans to enter the debt capital market on July 27 with public issue of NCDs aggregating to Rs 500 crore with option to retain over subscription up to Rs 500 crore for issuance of additional NCD. The company already has filed prospectus with the Registrar of Companies to this effect. The NCD issued with an interest offer in the range of 10.75 per cent to 11.25 per cent a year, closes on August 14.

Shriram Transport Company is finance provider for commercial vehicle industry and dominates in financing pre owned commercial vehicles. The commercial vehicle finance company is looking to utilize the funds raised through NCD for meeting their lending requirements.

Meanwhile, Rajeev Garg maintained that despite dipping sales of commercial vehicles last year, Shriram Transport Company has grown by 25 per cent. It is because the company main business (75 per cent) comes through financing of pre-owned commercial vehicles and only small percentage(25 per cent) comes through financing of new commercial vehicles. The market of pre-owned commercial vehicles has not seen any significant downslide.

Commenting on the future products that company was looking to add to their portfolio, Garg maintained that company was looking to venture into equipment financing business with focus on retail borrowers.