Shriram Transport Finance to raise Rs 5,000cr via bonds issue

Shriram Transport Finance today said it will raise up to Rs 5,000 crore through a public issue of bonds to augment its business growth.

The non-banking financial company (NBFC), which mainly provides financing for pre-owned commercial vehicles, will raise the amount by issuing 5 crore secured redeemable non-convertible debentures (NCDs).

The public issue will open on June 27 and closes July 20 with an option of early closure, the company said.

The funds raised through this issue will be used for onward lending, financing, and for repayment/prepayment of interest and principal of existing borrowings of the company and for general corporate purposes, Shriram Transport Finance said.

"The funds will be used to fund business expansion mainly as the demand for loans is good and the monsoon is also good. We expect 20 per cent growth in our loan book in the current fiscal," Shriram Transport Finance MD & CEO Umesh Revankar said.

The proposed NCDs under this issue have been rated AA+/stable by Crisil and 'IND AA+: Outlook Stable' by India Ratings and Research for an amount of up to Rs 5,000 crore, the company said.

These ratings indicate high degree of safety regarding timely servicing of financial obligations and very low credit risk, it said.

The bonds, to be available in three tenors of 3, 5 and 10 years, will carry coupon of 9.10 per cent, 9.30 per cent and 9.40 per cent respectively with monthly, annual and cumulative payment options.

These NCDs, bearing a fixed rate of interest, will be offered under seven different series.

The company said it will give additional incentive of 0.10 per cent for the individual investors across all series.

Senior citizens (initial allottees) are entitled to additional incentive of 0.25 per cent per annum across all series.

Axis Bank, AK Capital Services, Edelweiss financial Services, JM Financial Services Ltd, and Trust Investment Advisors Pvt Ltd are the Lead Managers to the Issue.