Shriram Housing Finance Ltd, Shriram group unit focusing in affordable housing segment, plans to raise equity capital up to Rs 400 crore in first half of next financial year (Fy22) to support business growth.
The capital will predominantly come from within Shriram group. Besides, capital infusion, the retained earnings in next two financial years will also support to grow loan book to Rs 8,000-10,000 crore level by March 2023, said its managing director and chief executive Subramanian Jambunathan.
The company is a majority owned subsidiary of Shriram City Union Finance (Shriram City) that owns 77.25 per cent of equity shares. The remaining 22.75 per cent of stake is held by Valiant Mauritius Partners FDI Ltd, according to CRISIL.
About Valiant putting in money (equity), he said they have been good partners and supported growth. The company will like their participation. It will be up to Valiant to decide.
The networth of company stood around at Rs 600 crore with loan book of Rs 3,138 crore at end of December 2020. The capital adequacy ratio was 21.3 per cent at end of December 2020.
The company is hungry for growth but not desperate and the emphasis is on building quality loan book. It will tap into customer base in Shriram group’s strong network in states like Andhra Pradesh, Telangana and Karnataka. The loan book should touch Rs 3,700 crore by March 2021, he added.
CRISIL believes that SHFL has sufficient liquidity, on standalone basis. Further, CRISIL expects SHFL to receive need-based support from its parent, Shriram City. In terms of liquidity, SHFL, as on December 31, 2020, had liquidity of Rs 673 crore (Rs 627 crore of cash and equivalents and Rs 46 crore of unutilised working capital lines). Against the same, they have total debt payments (including interest) of Rs 410 crore over the next six months till June 2021.