Used truck lender Shriram Transport Finance (STF) is targeting an expansion of up to 2 per cent in its margins during the January-March quarter on the back of higher securitisation, a top company official has said.
It also has a "tentative" plan of raising up to Rs 2,000 crore from its non convertible debentures issue route in FY15, the official said, adding that the plans for next year are yet to be firmed up.
"We will be securitising up to Rs 4,000 crore of our portfolio during the quarter as banks look to achieve their priority sector lending targets. This will help expand margin by 1-2 percentage points," the company's managing director Umesh Revankar told PTI here.
It had reported a dip in its net interest margin at 6.51 per cent for December 2013 as against the 6.75 per cent in the year ago period, on higher interest costs.
STF's portfolio can help banks achieve their priority sector lending (PSL) requirements for the small businesses category. Typically, raising money via securitisation transactions works out to be cheaper than market borrowings for a company.
The Chennai-headquartered STF had target of doing securitisation deals worth Rs 9,000 crore during the fiscal, of which a majority Rs 4,000 crore has been kept for the last quarter, Revankar said.
The company has already bundled up portfolios and began work on the securitisation process, he said, exuding confidence that it will be able to achieve the target.
Commenting on the liability side management of the company, Revankar said that ideally, STF would like to increase its reliance on the retail deposits and non convertible debenture issues, but said the high cost of these funds is a detrimental factor.
