Shriram Group to Consider Listing Insurance Arms in Upcoming Years

The Shriram Group is considering listing its insurance subsidiaries within the next one or two years, according to Umesh Revankar, the executive vice-chairman of Shriram Finance. He mentioned that both the general and life insurance businesses are performing well and will be listed once they reach a certain scale. "Both general insurance and life insurance we will be looking at listing may be in a year or two from now. So, once we reach a certain scale, we will do it," Revankar stated during a company event.

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Fundraising Plans and Market Conditions

Revankar discussed potential fundraising strategies, noting that an overseas issuance would only be considered after the US Federal Reserve reduces its rates. Domestically, the company has several options including bank loans, securitisation, and bond issues. He also commented on the impact of the RBI's recent measures on risk weights, which have increased the cost of funds. However, he noted that this increase is manageable as long as it applies uniformly across all players.

Challenges for Smaller NBFCs

While larger non-banking financial companies (NBFCs) are not facing significant fundraising challenges, smaller ones are struggling. Revankar highlighted that the group has established senior leadership for its asset management business, with a senior executive from Shriram City Union Finance leading it. Additionally, they have received preliminary approval to enter the asset reconstruction business, aiming to purchase non-performing retail portfolios from other companies.

Industry Developments and Proposals

Revankar addressed the ambitions of the NBFCs industry body FIDC to become a self-regulatory organisation, stating that it is progressing towards this goal. He also advocated for NBFCs to be included in the unified payment interface network, suggesting that the government should consider this proposal favourably.

Auto Industry Trends

Regarding the slowdown in passenger vehicle sales, Revankar explained that this trend is not uniform across all segments of the auto industry. Some areas are experiencing growth despite an overall shift from high demand to muted demand, leading to high inventories. He expressed optimism that upcoming festive sales would help balance this situation.

Revankar also mentioned that auto industry lobby group Fada has not held any meetings with NBFCs regarding any issues but speculated that concerns might exist about banks tightening dealer financing.

Meanwhile, Shriram Group has appointed former cricketer and coach Rahul Dravid as an endorser for their brand.

The company's strategic plans include listing its profitable insurance arms and exploring various fundraising avenues while navigating current market conditions. The group's initiatives in asset management and asset reconstruction reflect its commitment to expanding its business portfolio thoughtfully.