 "Shriram Finance")
Shriram Finance Ltd, India's leading retail non-banking financial company (NBFC), is expecting robust business growth in the construction and farm equipment sectors during the second quarter of this financial year.
The increase could be due to the government's rising infrastructure spending and favourable monsoon conditions, a company executive said on Thursday. The company has also maintained its projection of a 15 per cent growth in assets under management (AUM) for the current fiscal year.
"We're seeing increased demand for construction vehicles, which is likely to accelerate as India's infrastructure spending continues to rise. We expect more activity in that category after the monsoon. Given the favourable monsoon, I anticipate an increase in demand for farm equipment as well. We are closely monitoring the situation. I believe construction and farm equipment sectors are likely to see faster growth in the second quarter," said Umesh Revankar, Executive Vice Chairman of Shriram Finance.
During the first quarter of the fiscal year 2023-24, the company's AUM in the construction equipment segment increased by 11 per cent to Rs 14,626.15 crore, up from Rs 13,174.9 crore during the April to June quarter of 2022-23. Similarly, its farm equipment segment reported a 6 per cent rise in AUM from Rs 3,228.74 crore in Q1 FY23 to Rs 3,419.12 crore in Q1 FY24.
Revankar added that the company is also emphasising its micro, small and medium enterprises (MSME) business, expanding its scope nationwide from a previously South India-focused strategy. Its AUM from the MSME business during the quarter was Rs 20,044.8 crore, contributing to over 10 per cent of its total AUM.
"We expect the MSME sector to improve each quarter. Commercial and passenger vehicles remain our key sectors, so we do not anticipate a major shift in the proportion of overall lending. For the first time, we will be covering all of India for MSMEs. Until now, our focus was primarily on the South market. I believe as we expand into other regions, we should experience faster growth," Revankar added.
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Shriram Group also plans to launch its much-anticipated 'super app' for customers in the next couple of months. "Our super app is in the final stages of development. It's currently being tested among our employees for everyday activities. Once we're confident in its robustness, we'll roll it out to customers. We expect this to happen within a few months," he stated.
According to the company, the super app will allow customers to learn about and utilise products more quickly in a paperless mode, facilitating faster loan clearances with minimal documentation. It's intended to function like a mobile Shriram Branch.
