Shriram Transport Fin to tap debt market with Rs 1K cr NCD

Plans Rs 500 crore issue with option to retain upto Rs 500 crore from oversubscription

MUMBAI: Seeking to augment its financial capabilities, Shriram Transport Finance Company Limited (STFC) has filed its draft prospectus with the National Stock Exchange of India Limited (NSE) pursuant to its proposed public issue of secured Non-Convertible Debentures (NCDs), aggregating to Rs. 500 crores with an option to retain over-subscription upto Rs. 500 crores for issuance of additional NCDs.

STFC is a part of the Shriram conglomerate which has significant presence in financial services viz., commercial vehicle financing business, consumer finance, life and general insurance, stock broking, chit funds and distribution of financial products such as life and general insurance products and units of mutual funds. Apart from these financial services, the group is also present in non-financial services business such as property development, engineering projects and information technology.

STFC is one of the largest asset financing NBFCs in India with a niche presence in financing pre-owned trucks and Small Truck Owners (STOs). The Company was incorporated in the year 1979 and is registered as a Deposit taking NBFC with Reserve Bank of India under Section 45IA of the Reserve Bank of India Act, 1934.

With a track record of about 30 years, STFC is among the leading organized finance provider for the commercial vehicle industry with a focus to provide various credit facilities to STOs. The Company has also added passenger commercial vehicles, multi-utility vehicles, three wheelers, tractors and construction equipment to its portfolio, making it a diversified, end to end provider of finance solutions to the domestic road logistics industry.

STFC’s pan-India presence of 479 branches and over 600,000 customers has contributed to its overall growth over the years. The company has a team of around 12,196 employees.

STFC has demonstrated consistent growth in its business and profitability with its total income and profit after tax growing from Rs. 34,568.84 lakhs and Rs. 4,932.38 lakhs in Financial Year 2004-05 to Rs. 3,73,112.97 lakhs and Rs. 61,240.21 lakhs in Financial Year 2008-09 at a CAGR of 81.25% and 87.71%, respectively.

STFC intends to use the funds raised through the issuance of NCDs for various financing activities including lending and investments, subject to the restrictions contained in the Foreign Exchange Management (Borrowing and Lending in Rupee) Regulations, 2000, and other applicable statutory and/or regulatory requirements, to repay its existing loans and its business operations including for its capital expenditure and working capital requirements.

ENAM Securities Private Limited, A K Capital Services Limited, ICICI Securities Limited and Kotak Mahindra Capital Company Limited have been appointed as the Lead Managers to the Issue, while Integrated Enterprises (India) Limited will be acting as the Registrar to the Issue.