Shriram Transport plans to raise ₹50 billion in second half of FY23

Most of the fund-raising is likely to be via non-convertible debentures with a maturity of three years: MD

India's Shriram Transport Finance Company Ltd. plans to raise an additional ₹50 billion($627.20 million) in the second half of the financial year to fund growth opportunities.

The non-banking finance company (NBFC) has already raised ₹50 billion in the first half of this year and the additional funds raised would be separate from its existing refinancing plans amounting to ₹500 billion, Umesh Revankar, managing director of STFC, told Reuters on Tuesday.

Most of the fund-raising is likely to be via non-convertible debentures with a maturity of three years, he added.

The commercial vehicle financier had in December announced a merger with promoter Shriram Capital and diversified finance company Shriram City Union Finance, which is expected to be completed by the end of October, one month ahead of schedule, said Mr. Revankar.

The merged entity would be one of the largest shadow banks in the country, according to analysts.

The fund raising comes at a time when the overall loan growth may fall.

"At the start of the financial year, we were expecting loan growth to be around 15% for the merged entity. We anticipate that it may come down to 12% if rise in interest rate leads to slower demand," Revankar said.