The ongoing distress within the commercial vehicle lenders may result in the country’s largest used truck financier Shriram Transport Finance picking up yet another portfolio of a promoter looking to exit the business, a senior company official has said.
“Due to the trouble in the space, there are some mandates for selling portfolios in the market. We are on the lookout and in the next six months, we may purchase some portfolio,” the official told PTI.
If the acquisition fructifies, this would be the second acquisition by the company after the late 2009 deal when it had picked up the from the commercial vehicles and construction space portfolios of GE Transportation Financial Services for Rs 1,200 crore.
The official said the buyout of the GE’s businesses has played out well for the company. “Such a buyout helps as customers get serious in repaying once the lender changes and also helps us generate more business in the future,” the official said.
Asked if it will be acquiring a company or its portfolio, the official said that it will be only the portfolio consisting of receivables and not a company.
When contacted, the managing director and chief executive Umesh Revankar said the company looks at such opportunities on a regular basis but declined to offer any specifics.
It may be noted that the economic gloom, especially decisions like ban on mining, have had an adverse impact on the truck financing segment. Additionally, the regular diesel price hikes and the inability of operators to pass on the rise in input costs to consumers are only compounding the troubles for the financiers.
Shriram Transport has also reported a dip in its quarterly profit during this period and has said that it will take at least six months after an uptick in growth back to the 5—5.5 per cent levels for it to come back.
Commercial banks like HDFC Bank and Kotak Mahindra Bank have been reporting more stress from this or similar segments.