Shriram Transport Finance to raise funds

Shriram Transport Finance is proposing a public issue of upto Rs 1,000 crore by the method of issuing secured redeemable non-convertible debentures (NCDs) of the face value of Rs 1,000 each.

The company stated that it is coming out with its Tranche 2 issue of NCDs that will have a base size of Rs 200 crore with an option to retain oversubscription that aggregates to nearly Rs. 1,000 crore, which is within the shelf limit. The subscription for the Tranche 2 issue will open  on Monday, that is January 6, 2020, and will close on Wednesday, that is January 22, 2020, having an option of early closure or extension, as would be decided by the company’s Board of Directors or the duly constituted committee thereof, being the debt issuance committee - Public NCDs, as mentioned in the Tranche 2 prospectus.

The proposed NCDs under the Tranche 2 issue have been rated as ‘CARE AA+; Stable’ by CARE Ratings Limited, ‘CRISIL AA+/Stable’ by CRISIL Limited, and ‘IND AA+: Outlook Stable’ by India Ratings and Research Private Limited. These ratings are considered to have high degree of safety regarding timely servicing of financial obligations and carry very low credit risk. The funds, which will be raised through the Trance 2 issue, are intended to be used for onward lending, financing, repayment or prepayment of interest and principal of existing borrowings of the company, and for general corporate purposes. The NCDs, having a fixed rate of interest, will be offered under eight different series.

Shriram Transport Finance Company Limited is an asset financing non-banking finance company in the country’s organised sector, catering to first-time buyers (FTB) and small road transport operators (SRTOs) for financing pre-owned commercial vehicles.

On Thursday, the stock of the company closed at Rs 1,162, up by 1.72 per cent or Rs 19.60 per share. The 52-week high is Rs 1,296.75 and 52-week low is Rs 909.25 on the BSE.