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Sundaram Finance may raise Rs 2,000 cr

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BS Reporter Chennai

Sundaram Finance Ltd (SFL), a Chennai-based NBFC, is planning to raise debt in the range of Rs 1,500-2,000 crore to support disbursements. Meanwhile, the company has said, since the automobile industry has started slowing down it expects only a modest growth in disbursements.

Speaking on the sidelines of the company’s AGM today, T T Srinivasaraghavan, managing director, Sundaram Finance Ltd, said the company is looking to raise debt through term borrowings, NCDs (not retail) and other traditional modes.

“As part of our annual debt raising plan to meet the disbursement targets this year, we are looking to raise Rs 1,500-2,000 crore.”

 

While addressing the company’s shareholders, SFL’s Chairman S Viji said, “Overall sentiments seem to have turned slightly negative with infrastructure companies reporting a slowdown in investments and the corporate sector, from real estate to auto, witnessing a demand slowdown.”

After two successive years of high growth, sales of medium and heavy commercial vehicles have been almost flat in the first three months of the present fiscal, compared to the corresponding period in the previous year.

Light commercial vehicles, on the other hand, seem poised for another year of healthy growth, fuelled primarily by the sub-one tonne segment.

“Sales of passenger cars and utility vehicles have also slowed down in the first quarter and growth, if any is only expected to be moderate.”

Srinivasaraghavan added, cars are expected to grow by around ten per cent and Cvs would be around 5-8 per cent.

“Company expect only a modest growth in disbursements, but is however confident of maintaining profitability.”

The company also expects increased growth in the Tractor and LCV segments and increased company’s presence in the growing construction equipment segments,” said Raghavan.

SFL announced a total dividend of Rs 14 per share (140 per cent of the face value of Rs 10) for the year ended March 31, 2011, on the paid-up capital of Rs 55.55 crore.

The total payout, including dividend tax of Rs 4.45 crore will amount to Rs 82.22 crore.

The company has reported a net profit of Rs 275.50 crore in 2010-11 as against Rs 201.36 crore, a year ago, an increase of 28 per cent.

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First Published: Jul 14 2011 | 12:40 AM IST

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