SHTF Sec II (IFC-43916)

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
May 7, 2022
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
  • Transport
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)
$ 149.00 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.
Loan Amount (USD)
$ 149.00 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.
Primary Source

Original disclosure @ IFC website

Updated in EWS May 27, 2024

Disclosed by Bank Apr 7, 2022


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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.

Accorrding to IFC, the proposed project envisages a rupee denominated investment into securitized assets of Shriram Transport Finance Company Limited (SHTF) through Pass Through Certificates (PTCs) of up to USD 300 million equivalent (of which up to USD150 million will be through IFC’s own account and remaining through mobilization). The proposed project supports vehicle financing for micro, small and medium enterprises (MSME), particularly the micro segment, with a focus on the low-income states (LIS) and rural regions of India. The Covid-19 pandemic has aggravated the already weak economic environment for this segment since they are less resilient to exogenous shocks. Thus, this investment is part of IFC’s systematic effort to infuse confidence back into the market through innovative capital market instruments such as securitizations. These instruments will provide liquidity to the extremely important MSME segment through NBFCs, and enable resilient business recovery.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

According to the IFC, the proposed project envisages a rupee denominated investment into securitized assets of SHTF through Pass Through Certificates of up to USD 300 million equivalent (of which up to USD150 million will be through IFC’s own account and remaining through mobilization).

 
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.

According to the IFC, the SHTF is one of the largest asset-financing NBFCs in India with assets under management (AUM) of USD 16.6 billion (INR 1.24 trillion) as on 31 December 2021, with a very strong distribution network that caters to over 2.10 million customers through 1,834 branch offices and 792 rural centres across India. The company primarily lends to MSME clients in the transportation sector that are economically weak, have limited credit history and therefore are unable to raise funds from commercial banks.SHTF is listed on the Bombay Stock Exchange and National Stock Exchange and has a market capitalization of USD 4.1 billion as of 31 March 2022. As of 31 December 2021, 26.06 percent of SHTF’s shares were held by the promoter & promoter group, 53.25 percent were held by foreign portfolio investors and foreign institutional investors, 14.69 percent were held by FIs (including insurance companies, banks and mutual funds), 5.69 percent were held by public shareholders, and 0.31 percent were held by others

SHTF is listed on the Bombay Stock Exchange and National Stock Exchange and has a market capitalization of USD 4.1 billion as of 31 March 2022. As of 31 December 2021, 26.06 percent of SHTF’s shares were held by the promoter & promoter group, 53.25 percent were held by foreign portfolio investors and foreign institutional investors, 14.69 percent were held by FIs (including insurance companies, banks and mutual funds), 5.69 percent were held by public shareholders, and 0.31 percent were held by others.                                                   


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.

Shriram Transport Finance Company Limited
Sandeep Balagopalan
DGM – Corporate Finance and Treasury
Fax: +91 22 40959596
sandeep@stfc.in
G Block, BKC, Bandra East, Mumbai 400051, Maharashtra, India
https://www.stfc.in/

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Fax: 202-974-4384

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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

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