Shriram transport to raise Rs 1,000 crore through debentures

Shriram transport to raise Rs 1,000 crore through debentures
Shriram Transport Finance (STF), India's largest player in commercial vehicle finance, has announced the plan to raise Rs. 1,000 crore through debenture with Greenshoe option of Rs 500 crore.

The denture has maturity period of 3-5 years with 12% coupon rate, but the company is awaiting the quarterly policy review meeting of RBI to decide the final coupon rate. The current issue is rated AA+ by CARE and AA by CRISIL. 80% of the issue is reserved for retail investors.

The current issue is 3rd issue after Rs 500 crore debentures with 10.5% coupon rate and Rs 1,000 crore issue in 2009.

RBI has clarified that bank loans to NBFCs, excluding microfinance institutions which are categorised as NBFC, would not be classified as priority sector loans. This means the cost of funds of most NBFCs will go up.

Shriram transport finance has demonstrated consistent growth in business and profitability. The total assets under management have grown by a compounded annual growth rate (CAGR) of 40.68% from Rs 7,436.51 crore in FY 2006 to Rs. 36,086 crore in FY 2011.

Company has posted that total income and profit after tax increased from Rs 908.67 crore and Rs 141.64 crore in FY 2006 to Rs4,499.64 crore and Rs 873.12 crore in FY 2010 at a CAGR of 49.17% and 57.57%, respectively.

Read more about: shriram trans, automobile, bank, finance, bse, nse, stfc
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