Shriram Transport to raise Rs 2,000 cr through NCD

Shriram Transport Finance Company Ltd (STFC), part of Rs 60,000 crore Shriram Group, is planning to raise Rs 2,000 crore through Non-Convertible Debentures (NCD). The first tranche of the NCD, about Rs 375 crore, is expected next month. The money will be used to expand the business, to repay the loan and for other business purpose.

Addressing company's shareholders today at the company's Annual General Meeting at Chennai, Arun Duggal, chairman, Shriram Transport said that the public issue of the NCDs will be through one or more tranches during the current fiscal. The total money which the company plans to raise Rs 2000 crore.

The first tranche will be opened during the third week of July. Umesh Revankar, managing director, Shriram Transport Finance Company said the second tranche will depend on the interest rate, we will take a call post October.

Duggal said, the funds will be used for financing, repayment of loan and for other business operations.

The company, which is one of the largest asset financier increased its Assets Under Management to Rs 49,676 crore as on March 31, 2013 from Rs 40,213 crore, a year ago.

Despite tough condition and challenging environment the performance was "satisfactory" said Duggal.

Revankar added, rural markets are good and demand for small vehicles are also good. Impact on new vehicles sales will not impact us, considering STFC largely focus on used vehicles. Last year our used vehicle portfolio grew by 35 per cent.

On the outlook Duggal said, it is difficult to predict. The focus will be penetration in rural pockets and semi-urban markets, where the prospects are bright .

"We can sail through the macro-economic challenge," said Duggal.

Revankar expects around 12-15 per cent growth for STFC during the current fiscal.