Shriram City Union Finance Limited (Shriram City), is entering the debt capital market to raise Rs. 375 crore through a public issue of secured non-convertible debentures (NCDs) of the face value of Rs. 1,000 each.

It has an option to retain over-subscription up to Rs. 375 crore for issuance of additional NCDs aggregating Rs. 750 crore. Addressing presspersons here on Wednesday, Subhasri Sriram, Executive Director, said the funds raised would be used for part financing lending and investments. The debentures would have three-year and five-year maturity options and the interest rates under different categories would range from 11.6 per cent to 12.5 per cent. The issue is open from August 11 to 27.

The company has a track record of 25 years in financial services sector with focus on retail financing. Ms. Subhasri said the company had a dominant share of 95 per cent in the small loan segment (loan amount of less than Rs. 10 lakh) and 53 per cent share in micro, small and medium enterprises (MSME) segment.

The company had just entered the housing finance segment by floating a subsidiary, Shriram Housing Finance.

It would commence operations in the next 15-30 days, Ms. Subhasri said. According to R. Kannan, Managing Director, the company has reserved 80 per cent of the issue to retail investors. The plan was to come out with additional series of debentures periodically, he said.

Our Hyderabad Special Correspondent writes:

Addressing presspersons in Hyderabad, Y.S. Chakravarthi, Executive Director, said the company had received the approval from National Housing Bank for the housing subsidiary.

Asked how the company would go about its home loan business, he said the details were yet to be firmed up but added that the entire process — from verification, disbursement, collection and closure — would be done by the company's own staff.

“In our vehicle and small enterprise business lending too, we do not outsource any part of the process but prefer doing it ourselves as it helps in sealing the bond with our clients,” he said.

Keywords: Shriram City