Shriram Transport To Raise Up To Rs 10,000 Crore Via Bond Issue

Shriram Transport Finance Company Ltd. said it plans to raise up to Rs 10,000 crore through public issuance of bonds.

The company would come out with the first tranche of secured redeemable non-convertible debentures of face value of Rs 1,000 each having a base size of Rs 300 crore. There would be an option to retain over-subscription aggregating up to Rs 10,000 crore, Shriram Transport said in a release.

"The funds raised through the Tranche-I issue will be used for onward lending, financing, and for repayment/prepayment of interest and principal of existing borrowings of the company and for general corporate purposes," said Shriram Transport.

The Shriram Transport bonds, bearing a fixed interest rate in the range of 9.12-9.70 percent per annum, will be available under 10 different series.

Senior citizens under certain category of investment will be entitled for additional incentive of 0.25 percent per annum across all series, the company said.

Shriram Transport caters to first time buyers and small road transport operators with a primary focus on financing pre-owned commercial vehicles.

The proposed Shriram Transport NCDs have been rated ‘CARE AA+ Stable’ by CARE Ratings, ‘CRISIL AA+/Stable’ by CRISIL and ‘IND AA+’ with outlook stable by India Ratings. These ratings indicate high degree of safety regarding timely servicing of financial obligations and carrying very low credit risk, the company said.

Shriram Transport said it will list the bonds on the National Stocks Exchange and the Bombay Stock Exchange.

On Monday, Shriram Transport shares rose 1.11 percent to Rs 1,057.65 crore apiece while the benchmark Sensex gained 0.41 percent to end the day at 38,896.71 points.