Shriram Transport Finance Secures $100 Million from IFC

7 Mar 2024 , 12:08 PM

Shriram Transport Finance Co. Ltd. stated on Thursday that it hopes to obtain $200 million from International Finance Corp. (IFC) in order to finance the financing to micro, small, and medium-sized businesses (MSMEs) and the acquisition of commercial vehicles.

According to the agreement, IFC would invest about $100 million from its own account and get the remaining funds from “like-minded partners.”

According to a press statement from the company, “the deal uses a unique securitization structure to mitigate foreign exchange risks and attract patient capital from pension funds, insurance firms, and foreign institutional investors.”

The money raised will be used to finance MSMEs and small road transport operators in low-income states’ rural and semi-urban areas.

IFC made an investment in Shriram Transport in 2016 in order to increase the number of MSME loans it offers to low-income states.

To further diversify the company’s funding sources, IFC invested in the first offshore masala bonds denominated in rupees in 2017.

The non-banking financial company recorded a roughly 11% increase in net profit to ₹634.25 Crore for the quarter that ended on June 30, compared to ₹572.90 Crore for the same period last year.

Compared to the same period last year, when net interest income was ₹1,822.89 Crore, it climbed by 7.625% to ₹1,961.74 Crore for the quarter.

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