Used truck lender Shriram Transport Finance is targeting an expansion of up to 2 per cent in its margins during the January-March quarter on the back of higher securitisation, a top company official has said.

It has also a “tentative” plan of raising up to ₹2,000 crore from its non-convertible debentures issue route in FY15, the official said, adding that the plans for next year are yet to be firmed up.

“We will be securitising up to ₹4,000 crore of our portfolio during the quarter as banks look to achieve their priority sector lending targets. This will help expand margin by 1-2 percentage points,” Shriram Transport Managing Director Umesh Revankar told PTI here.

It had reported a dip in its net interest margin at 6.51 per cent for December 2013 against the 6.75 per cent in the year-ago period on higher interest costs.

STF’s portfolio can help banks achieve their priority sector lending requirements for the small businesses category. Typically, raising money via securitisation transactions works out to be cheaper than the market borrowings for a company.

The Chennai-headquartered company had a target of doing securitisation deals worth ₹9,000 crore during the fiscal, of which a majority ₹4,000 crore has been kept for the last quarter, Revankar said.

The company has already bundled up portfolios and begin work on the securitisation process, he said, exuding confidence that it will be able to achieve the target.

Commenting on the liability side management of the company, Revankar said that ideally, Shriram Transport would like to increase its reliance on retail deposits and non-convertible debenture issues, but said the high cost of these funds is a detrimental factor.

Related Topics
comment COMMENT NOW