Over the years, it has emerged as a bell-weather NBFC in corporate India, upstaging traditional giants. On 16 July this company, India’s largest truck financier, entered the debt market via a non-convertible debenture offering. The size of the issue: Rs 375 crore; plus a green-shoe option of Rs 375 crore. We are talking of Shriram Transport Finance Company (STFC) of the Chennai-based Shriram Group.
The offering has been rated both by CRISIL and CARE as having a high degree of safety with regard to timely servicing of financial obligations carrying very low credit risk. The end use of the fund is for financing activities like lending and investments, repaying existing loans for business operations including capital expenditure and meeting working capital requirements.
The current issue is priced at an annual coupon rate of 9.65-11.15 per cent. This is close to the 11.4 per cent at which STFC raised funds last year. The investor should be happy as it is well above the inflation rate and is well rated.
As a company STFC focuses on financing used and new vehicles. The NCDs will be listed both on the NSE and the BSE.
The company’s first quarter (April-June) consolidated net profit was Rs 366 crore.
On standalone basis, NBFC reported a net profit of Rs 341 crore.
The company has its entire 40 per cent stake in Shriram Asset Management Company (SAMC).