Signaling a return to normalcy, India's largest truck lender, Shriram Transport Finance Company on Wednesday said its collection efficiency returned to 100 per cent in the second half of January after undergoing a brief blip in the first fortnight.
Shriram Transport Finance Company Vice-Chairman and Managing Director Umesh Revankar said the collection rates would rise in February and March as more people get vaccinated and the Omicron variant was less impactful on business than originally feared. Collections rates reflects confidence levels in borrowers, often seen as a proxy of economic activity.
"Third wave (of Covid-19) was only temporary. Doctors advise normal treatment and people have come out of fear and business has returned to normal. Some state governments imposed some restrictions but later it was reversed, by most of them. Everything appears normal now", he told PTI.
The company pegs disbursements to reach pre-Covid-19 levels and expects demand to "shoot up" in coming months. "For February and March we feel it will be good. We feel things will be normal and it will be pre-Covid-19 levels, demands will shoot up soon ", he said. He expressed hope that additional allocations in the union budget for infrastructure would propel demand for trucks.
Revankar has projected stronger Q4 growth. "Q4 disbursements will be higher than Q3 for us.. Q3 disbursements were Rs 15,000 crore and Q4 we can expect it to be more than 10 per cent," he said. "Net NPA will be brought under 4%".
On liquidity he said, the company maintained 'excess liquidity' and would try to reduce it in the coming quarters. "(in terms of) market liquidity it is good, fund availability is good", he said. To a query on assets under management (AUM), he said, "we will end up with Rs 1,28,000 crore. Already in December AUM was Rs 1,24,000 crore.." Regarding the outlook for FY, he said, "We are quite upbeat.
We feel the market will fully recover and expect 10-12 per cent growth as a standalone company. Since we are also having a merger plan, we expect 15 per cent growth." In December 2021, Shriram Group announced a composite scheme of arrangement for the merger of Shriram City Union and Shriram Transport Finance.
The respective boards of the companies -- Shriram Capital Ltd, Shriram City Union Finance Ltd and Shriram Transport Finance Company Ltd announced the merger, which would be the largest retail finance NBFC in India.