Shriram TFC NCD (IFC-37767)

Regions
  • South Asia
Where the impacts of the investment may be experienced.
Countries
  • India
Where the impacts of the investment may be experienced.
Financial Institutions
  • International Finance Corporation (IFC)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Active
Bank Risk Rating
FI
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Voting Date
Jun 15, 2016
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower
SHRIRAM TRANSPORT FINANCE COMPANY LIMITED
The holder of the loan, grant, or other investment.
Sectors
  • Finance
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, etc.
Investment Amount (USD)
$ 98.09 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Primary Source

Original disclosure @ IFC website

Updated in EWS Jul 24, 2018

Disclosed by Bank Mar 31, 2016


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Project Description

The proposed project consists of a senior debt investment in Shriram Transport Finance Company Limited (“STFCL” or the “Company”) a leading non-banking finance company primarily focused on financing pre-owned commercial vehicle financing across India. STFCL incorporated in 1979, is the flagship company of the Shriram Group, and caters to more than 1.2 million clients who are typically first time users or driver turned owners. The Company has an outstanding asset under management of INR665billion as of 31st December 2015; 50% of which is in rural and semi-urban areas across all states in India.

People Affected By This Project

((i) Access to finance for micro-small and medium enterprises ("MSME"): STFCL has more than 80% of its clientele from the MSME sector and is expected to add another 600,000 MSME customers in the next five years which is expected to create estimated direct jobs of around 1.5 million.

(ii) Rural and Low Income States ("LIS") thrust: As STFCL increases its reach and penetration into underserved areas, the proportion of its assets in rural areas and LIS is expected to increase from 50% to 70% and from 21% to 30% respectively.

Investment Description
  • International Finance Corporation (IFC)

STFCL is part of the Shriram Group, a diversified group established primarily as a chit fund business over three decades ago by R Thiagarajan, AVS Raja and T Jayaraman. The group had initially started with financing used commercial vehicles and now has businesses covering the entire financial sector. Over the last decade, Shriram Group has grown at a CAGR of over 40%, and has over 2400 branches, more than 45,000 employees, and a strong customer base of 9.5 million.

The shareholders of STFL include Shriram Capital (26.05%), Piramal Enterprises Limited (9.96%) and public (6.66%) whilst the remaining is held by diversified Foreign Institutional Investors/Foreign Portfolio Investors (52.91%) and body corporates/mutual funds/others (4.42%).

The proposed project involves an investment of upto US$150 million equivalent (approximately INR10 billion) in the form of senior debt of the Company.

Private Actors

Shriram Transport Finance Company Limited is a leading non-banking finance company primarily focused on financing pre-owned commercial vehicle financing across India. STFCL incorporated in 1979, is the flagship company of the Shriram Group, and caters to more than 1.2 million clients who are typically first time users or driver turned owners. The Company has an outstanding asset under management of INR665billion as of 31st December 2015; 50% of which is in rural and semi-urban areas across all states in India.

It is part of the Shriram Group, a diversified group established primarily as a chit fund business over three decades ago by R Thiagarajan, AVS Raja and T Jayaraman. The group had initially started with financing used commercial vehicles and now has businesses covering the entire financial sector. Over the last decade, Shriram Group has grown at a CAGR of over 40%, and has over 2400 branches, more than 45,000 employees, and a strong customer base of 9.5 million.

Contact Information

ACCOUNTABILITY MECHANISM OF IFC

The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/

CONTACTS

Mr. Swaminathan
Senior Vice President Finance
SHRIRAM TRANSPORT FINANCE CO. LTD. Corporate Office: Wockhardt Towers, 3rd Floor, West Wing, G Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400051. Tel. No.: +91 22 4095 9595 Fax: +91 22 4095 9596/97