Shriram Finance plans to raise $1 bn from overseas; shares hit a life high

Shriram Finance shares hit all time high after the company plans to raise $1 bn from overseas in the next 6 months

Shriram Finance stock buzzing in trade: Shares of Shriram Finance, a non banking financial company (NBFC), rose up to 2.1 per cent intraday to clock a fresh all-time high of Rs 3,310 per share on Monday, September 9.

However, at around 12:50 PM, Shriram Finance stocks were off record highs, and were trading 1.73 per cent higher at Rs 3,295.4 apiece. In comparison, BSE Sensex was trading 124.87 points higher at 81,308.8 levels.

The NBFC Shriram Finance revealed its plan to raise $1 billion (about Rs 8,300 crore) from overseas in the next 6 months to fund its business growth, according to a PTI report.

 

"We are planning to raise $300 million in the next few weeks, maybe by October, and the rest $500-700 million during the remaining part of the current financial year," Y S Chakravarti, managing director and CEO of Shriram Finance told PTI.

The fundraising will include loans from development financial institutions like the Asian Development Bank, Kfw, and the United States Development Finance Corporation (DFC). The timing would depend on market conditions, Chakravarti said.

To fund its business growth, the Non-Banking Financial Company (NBFC) raised resources from diversified sources like public deposits, bank finance, and raising money from domestic markets.

Chakravarti further said that loan growth is expected to increase 15 to 16 per cent during the current financial year (FY25).

Additionally, global brokerage UBS maintained its 'Buy' call on Shriram Finance and raised the target to Rs 3,850 per share from Rs 2,915 per share, according to reports.

UBS said that net interest margin (NIM) is transitory and accomplishing new segments will be key going ahead. Further, asset quality will remain stable and credit cost guidance will be maintained.

Moreover, the company management expects the cost-to-income (C/I) ratio to improve and remain within the guided range between 26 per cent to 27 per cent.

In the past one year, shares of Shriram Finance have given returns of 65.3 per cent against BSE Sensex's rise of 21.8 per cent.