Shriram Finance raises $100 mln long-term funding from ADB

The funding will enable Shriram Finance (SFL) to further its financial inclusion mission.

India's largest retail NBFC secured long-term funding of $100 million from the Asian Development Bank (ADB). The External Commercial Borrowing (ECB) is a 5-year loan and is under SFL's Social Finance framework.

The funds raised from ADB, a regional development bank, will enable SFL to provide credit towards the purchase of new and used vehicles throughout India. Proceeds from ADB can be used to finance for commercial purposes for BS VI compliant vehicles and electric vehicles, specifically finance women entrepreneurs, cater to under-developed states of the country, and empower and promote the social and economic status of the underserved communities in India.

Besides the ADB loan, SFL has also successfully raised $250 million from US Development Finance Corporation and $475 million through a 144A bond from the international market during 2022, thereby continuing to diversify its funding profile and its objectives for financial inclusion.

Umesh Revankar, executive vice chairman, Shriram Finance said, "SFL's success in securing international funding from ADB, a regional development bank is an enhancement to our strength and stability. We will finance for buying of vehicles and equipments in new and untapped markets to provide business opportunity and generate employment. This would empower more communities in semi urban and rural areas to optimize their income and to have a better quality of life."

Shriram Finance is primarily engaged in the business of financing commercial vehicles. It also provides loans for equipment and other business purposes. It also accepts deposits from the public.

The company's consolidated net profit jumped 38.2% to Rs 1,069.52 crore on 13.8% rise in total income to Rs 5,351.28 crore in Q2 FY23 over Q2 FY22.

The scrip rallied 5.20% to settle at Rs 1379.80 on Friday, 30 December 2022.

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