Shriram II

India

Transportation Transportation

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

Financing partners
Deutsche Bank, FMO

GuarantCo guarantee
INR 916 million (USD 20 million)

Total transaction amount
INR 2,250 million (USD 490 million)

Transaction 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 low-income 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.