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Portfolio/Shriram II

INR 916 million partial credit guarantee of Tier II capital raising by Shriram

Shriram II
Transport
India

Overview

Date of Transaction

September 2010 

Country

India

Financing Partners

Deutsche Bank, FMO

GuarantCo Guarantee

INR 916 million (USD 20 million)

Sector

Transport

Total Transaction Amount

INR 2,250 million

GuarantCo Benefits

Shriram needs to continually raise additional capital in line with the rising demand for its truck loans. Deutsche Bank were seeking to syndicate INR 2,500 million of Tier II capital to allow Shriram to expand their financing operations. Such capital issues compete with higher yielding assets for scarce capital in India, making obtaining reasonably priced capital funds a challenge

GuarantCo and FMO’s participation enabled Shriram to raise the capital at affordable rates which can be used to leverage much larger borrowings from commercial lenders

Development Benefits

Shriram finances small truck owner-operators who would otherwise have to borrow from unlicensed money lenders. The finance enables thousands of poor truck drivers to purchase their own vehicles rather than remaining employees.

Shriram’s core business of commercial vehicle finance continues its strong growth. Shriram is also now seeking to expand its products to finance other small infrastructure equipment servicing India’s growing infrastructure requirements.

ALL PROJECTS

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