The country’s largest commercial vehicle financing firm, Shriram Transport Finance Company, plans to raise up to Rs 1,000 crore through the sale of non-convertible debentures (NCDs) of face value of Rs 1,000 each.

The issue will be open from June 27 to July 9.

“The funds will be used for our various financing activities including lending and investments, to repay existing loans and for business operations including capital expenditure and working capital requirements,” the Shriram Transport Finance Company Managing Director, Mr R. Sridhar, told reporters here today.

“We have already raised (funds) twice earlier. This is the third time we are coming to the market for raising resources,” he said.

The issue would aggregate up to Rs 500 crore with an option to retain oversubscription up to Rs 500 crore for issuance of additional NCDs aggregating up to Rs 1,000 crore.

The money will be raised through three-year and five-year bonds. The five-year bonds will have a put and call option at the end of the fourth year.

The company will pay an interest of 11.6 per cent to a reserved category of retail investors, 11.35 per cent to an unreserved category of retail investors and 11.1 per cent to other investors on the five-year bonds.

On the three-year bonds, the company will pay 11.35 per cent coupon to the reserved category of retail investors, 11.1 per cent to the unreserved and 11 per cent to other investors.

The non-banking finance firm has roped in JM Financial and ICICI Securities as lead managers for its issue while RR Investor Capital Services and Karvy Investor Share Services are co-lead managers.

The issue has been rated AA by rating firm Crisil and AA+ by Care Ratings.

“Despite inflation, high interest rate and diesel prices, we have been doing well and are very optimistic about the future. We are financing 70 per cent to old vehicles and the rest to new commercial vehicles,” Mr Sridhar said.

When asked the impact of consequent interest rate hikes by RBI, he said: “The industry may face a sluggish phase in the near future but it will not have a significant impact on our company.”

Asked if the company planned to pass on the additional burden to its customers, he said: “We are observing the situation and have not decided anything yet.”

The RBI recently raised its short-term lending (repo) rate by 25 basis points to 7.5 per cent and the short-term borrowing (reverse repo) rate by a similar margin to 6.5 per cent.

At present, the company has eight lakh customers and 488 branches in the country.

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