Shriram TFC NCD (IFC-37767)

Regions
  • South Asia
Geographic location where the impacts of the investment may be experienced.
Countries
  • India
Geographic location 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
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
FI
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Jun 15, 2016
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
SHRIRAM TRANSPORT FINANCE COMPANY LIMITED
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
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, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 98.09 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Campaign Documents
Primary Source

Original disclosure @ IFC website

Updated in EWS Jul 24, 2018

Disclosed by Bank Mar 31, 2016

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed 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
People Affected By This Project refers to the communities of people likely to be affected positively or negatively by a 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
Here you can find a list of individual development financial institutions that finance the project.

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.

Financial Intermediary
A financial intermediary is a bank or financial institution that receives funds from a development bank. A financial intermediary then lends these funds to their clients (private actors) in the form of loans, bonds, guarantees and equity shares. Financial intermediaries include insurance, pension and equity funds. The direct financial relationship is between the development bank and the financial intermediary.
Private Actors Description
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

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
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

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

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How it works