Shriram Transport: Analysts see limited near-term synergy post merger

Street has reckoned Shriram Transport Finance Corporation as an indirect play on the CV cycle - this appeal will reduce post the potential merger, analysts said

Shares of Shriram Transport Finance plunged 7 per cent intra-day, to Rs 1,371 on the BSE on Tuesday, as most analysts saw limited upside for the company post its proposed merger with Shriram Capital and Shriram City Union Finance.

This was on the back of limited scope for synergies given the varied nature of operating business segments and underlying customer base, analysts said.
 

"Given operationally challenging and diverse operations – Shriram Transport Finance has branches outside city while Shriram City Union Finance has local presence – immediate synergies are hard to come by," highlighted Prakhar Agarwal and Parth Sanghvi, analysts