Shriram Transport to infuse Rs 600 cr in new arm

Asset financing company, Shriram Transport Finance Company (STFC), plans to infuse around Rs 600 crore capital in its proposed subsidiary, for conducting equipment finance business, which is expected to float in a month.

Besides, the non-banking finance company has also forayed into gold loan by joining hands with one of the group’s subsidiary.

Speaking to reporters here, STFC Managing Director R Sridhar said that formalities to float the new equipment finance company were almost completed and in another one month the new company would commence operations.

The new company will have a capital of around Rs 500-600 crore that will help to achieve its business target of around Rs 6,000 crore assets under management over the next three years, said Sridhar.

 

He added, the capital would be infused by STFC. “In later stage, we will look for partners,” said Sridhar.

It may be noted that STFC is already into equipment finance company. Currently, this business contributes to the tune of around Rs 2,000 crore to STFC’s total business.

“While, STFC will continue this business for its customers, the new company will focus on new customers”, said Sridhar.

He added, the idea to float a new company was to bring new management team, which had exposure and underwriting ability. The new team had been already assembled, noted Sridhar.

Meanwhile, STFC forayed into gold loan business by joining hands with one of the group’s subsidiaries. “We joined hands with Shriram City Union Finance and it will be a fee-based income for STFC,” said Sridhar. He added that Shriram City will use STFC’s infrastructure and people across the country.

Currently, STFC has around 500 branches with over 7,000 field officers. STFC currently has 7-8 lakh truck owners and 10-15 lakh medium and lower class population as investors. “Our immediate targets would be our customers and investors,” said Sridhar.

The company expects a gold loan portfolio of around Rs 1,000 crore, said Sridhar.