Shriram Transport Finance Company Ltd (STFCL) today said it is witnessing "active uptake" in the heavy new vehicle and used CV space, and hopes to maintain its leadership position in the pre-owned CV financing segment over the medium term.
"Currently, we are witnessing active uptake in the heavy new vehicle and used CV space. The re-sale value of vehicles is looking better and the demand is quite good in many states," STFCL Managing Director Umesh Revankar said in a statement here.
The flagship company of Shriram Group has strong structural advantages over its peers, which will support its above-average growth plans and enable the firm to maintain leadership position in the pre-owned CV financing segment over the medium-term, he said.
The company said it will be better placed to raise resources at lower cost both from the bond market and also from banks following action by rating agency Crisil, which recently upgraded its fixed deposits programme from FAA+/ Positive to FAAA/Stable, NCD from AA/Positive to AA+/Stable, long term bank facilities from AA/Positive to AA+/Stable, reflecting improving outlook for CV sector.
Commenting on Crisil ratings upgrade and the business outlook, Revankar, said, "We are pleased on getting an upgrade from Crisil. This will be a huge benefit to the company especially at this juncture when the economy is reviving. We will be better placed to raise resources at lower cost both from the bond market and also from banks."
Crisil stated that the growth opportunity in the pre- owned CV financing business remains strong, given that a large proportion of the financing requirement is still being catered by the unorganised market, coupled with the replacement demand for more than three million units of CVs sold over the past five years.
STFCL has been gradually expanding into rural markets and has set up 776 rural centres till March 31, 2015 to tap this opportunity.
The company's pre-owned CV financing constituted about 91 per cent of the its assets under management (AUM) of Rs 59,100 crore as on March 31, 2015.
