Shriram Transport Finance to set up eqpt finance arm

Chennai-based commercial vehicle financier Shriram Transport Finance Company Ltd is planning to set up a subsidiary for equipment finance. The proposed capital for the new company is around Rs 150 crore. Meanwhile the finance company’s board has approved to raise funds by way of a public issue.

R Sridhar, managing director, Shriram Transport Finance Limited told Business Standard that the new company would commence operation in the next three months and will operate at group company’s offices located across 470 locations in the country.

He added, the company would cater to small and medium contractors in the construction industry before diversifying into other segments.

Meanwhile the company in an announcement to BSE today said that company’s board of directors has approved to raise funds by way of a public issue of secured, redeemable non-convertible debentures not exceeding Rs 1,000 crore in one or more tranches, pursuant to the provisions of the SEBI Regulations, 2008.

Shriram Transport Finance Limited, part of Chennai-based Shriram group, has reported a 35.67 per cent growth in the net profit in the quarter ended March 31 2009 which stood at Rs 153.8 crore as compared to 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.

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.