Non-Banking Financial Company (NBFC) Shriram Finance aims to raise $1 billion (approximately ₹8,300 crore) from international sources over the next six months to support its business expansion. The company plans to secure $300 million in the coming weeks, potentially by October, with an additional $500-700 million anticipated later in the financial year.
The fundraising will also include loans from development financial institutions such as the Asian Development Bank, KfW, and the United States Development Finance Corporation (DFC). The timing of these fundraises will be influenced by market conditions.
To fuel its growth, Shriram Finance utilizes various funding sources, including public deposits, bank finance, and domestic markets. The company expects its loan growth to increase by 15-16% during the current financial year.
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As of June 2024, Shriram Finance’s Assets Under Management (AUM) were ₹2.33 trillion. Disbursements for Q1 FY25 amounted to ₹37,710 crore, up from ₹30,455 crore in Q1 FY24.
Following the Reserve Bank of India’s November 2023 directive to require more capital for loans to NBFCs, fundraising from banks has become more expensive, particularly for smaller NBFCs. Despite this, Shriram Finance, which offers loans for commercial vehicles and small and medium-sized enterprises, has not faced significant funding pressure due to its high credit rating and diverse borrowing sources.
Chakravarti noted that smaller, lower-rated NBFCs are feeling the impact more acutely, but Shriram Finance’s bank borrowings constitute only about 24% of its total liabilities.
In terms of its gold loan business expansion, the company plans to increase its branch network from 1,500 to 2,000 over the next two years.
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