India: Shriram Transport set to raise $200m from IFC

Shriram Transport Finance on Thursday said it is looking to raise $200 million from the International Finance Centre (IFC) to fund purchase of commercial vehicles and for on-lending to micro, small and medium enterprises (MSMEs). According to the deal, half of the total amount will come from IFC’s own account and rest from “like-minded partners”.

The first tranche of $82 million has already been disbursed, of which half is from IFC’s own account, the company said in a press release.

“The deal uses a unique securitization structure to mitigate foreign exchange risks and attract patient capital from pension funds, insurance firms, and foreign institutional investors,” the company said.

The proceeds will be used for lending to small road transport operators and MSMEs in rural and semi-urban areas in low-income states.

In 2016, IFC had invested in Shriram Transport to help expand its MSME loan portfolio to low-income states. In 2017, IFC invested in the company’s first offshore, rupee-denominated masala bonds, for further diversification of its funding sources.

Net interest income for the quarter increased by 7.62% to1,961.74 crore as against 1,822.89 crore in the year-ago period.

This article was first published on livemint.com.