Banks COVID-19 Fundamentals Market View SHRIRAM TRANSPORT FINANCE CO.LTD. PIRAMAL ENTERPRISES LTD.

Why is Shriram Transport looking to aggressively raise funds in the market?

Answer

8 months ago

Shriram Transport Finance Company on Friday said that its planning to raise funds through the issuance of debt securities. "The company is considering raising of funds through various options of borrowings including by way of issue of debt securities in onshore/offshore market by public issue and/or private placement basis and commercial papers," Shriram Transport Finance company said in a filing to BSE.

However, the company did not specify the amount that it is planning to raise.

"Based on the market conditions the meeting(s) of banking and finance committee/debt issuance committee-Public NCDs/Bond Issuance Committee will be held during the month ending March 31, 2020 to consider and approve the terms and conditions including the issue price of debt securities," the filing said.

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8 months ago

Shriram Transport Finance will raise Rs.4000 crore via a qualified institutional placement (QIP) to augment liquidity. Details of the fund raising are awaited. Timing may be critical as most corporates are wary of approaching the markets at the current juncture. The QIP is most likely to be done through a fresh issuance of equity shares. The capital is meant to preserve liquidity in hand. Currently, the Piramal Group owns 20% in Shriram Capital, which in turn holds 26.23% in STFC. Recently, CRISIL had raised questions over STFC’s collections and asset quality metrics in the current environment. The borrowers of STFC are primarily individual small road transport operators whose truck utilisation and income streams are vulnerable to weak economic activity. Apart from this equity issuance, STFC will also look to raise up to Rs.35,000 crore via bond issuances

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