Shriram Housing Finance Ltd, Shriram group unit focusing in affordable housing segment, plans to raise equity capital up to Rs 400 crore in first half of next financial year (Fy22) to support business growth.
The capital will predominantly come from within Shriram group. Besides, capital infusion, the retained earnings in next two financial years will also support to grow loan book to Rs 8,000-10,000 crore level by March 2023, said its managing director and chief executive Subramanian Jambunathan.
The company is a majority owned subsidiary of Shriram City Union Finance (Shriram City) that owns 77.25 per cent of equity shares. The remaining 22.75 per cent of stake is held by Valiant Mauritius Partners FDI Ltd, according to CRISIL.
About Valiant putting in money (equity), he said they have been good partners and supported growth. The company will like their participation. It will be up to Valiant to decide.
The networth of company stood around at Rs 600 crore with loan book of Rs 3,138 crore at end of December 2020. The capital adequacy ratio was 21.3 per cent at end of December 2020.
The company is hungry for growth but not desperate and the emphasis is on building quality loan book. It will tap into customer base in Shriram group’s strong network in states like Andhra Pradesh, Telangana and Karnataka. The loan book should touch Rs 3,700 crore by March 2021, he added.
CRISIL believes that SHFL has sufficient liquidity, on standalone basis. Further, CRISIL expects SHFL to receive need-based support from its parent, Shriram City. In terms of liquidity, SHFL, as on December 31, 2020, had liquidity of Rs 673 crore (Rs 627 crore of cash and equivalents and Rs 46 crore of unutilised working capital lines). Against the same, they have total debt payments (including interest) of Rs 410 crore over the next six months till June 2021.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU