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Shriram Finance pegs its borrowing program for FY24 at ₹60,000 crore. Spelling out the avenues for raising this incremental funding, YS Chakravarti, MD & CEO of the company, said nearly ₹12,000 crore will be raised through public deposits.
“Our public deposit programme is also growing quite robustly. We can raise another ₹12,000 crore with the current network and that’s happening quite smoothly. We would like to reach the maximum permissible limit.”
Roughly 20 per cent of the incremental requirements will be met though bonds, while a similar proportion would be made up from capital market instruments. The remaining is likely to be raised through bank debts and from developmental financial institutions.
‘Leeway aplenty’
When asked whether the traditional bank funding route is operating without any hiccups post-merger, Chakravarti said the company has not seen any constraints.
“However, for a few private banks, we have hit the ceiling,” he said. Therefore, Shriram Finance would increase its borrowings from public sector banks where the company enjoys comfortable exposure limits. “With any public sector bank, we have not even come near the limit. There is a lot of leeway on the bank side.”
While the lender is in talks with a few development financial institutions to meet FY24’s borrowing plan, the only route Chakravarti possibly shut down is the overseas bond. “Now may not be the right time to go for it,” he said.
Likewise, if the pricing is favourable, Shriram Finance is also exploring the retail non-convertible debentures (NCD) option as well. “We are also looking at, but we’ll wait for a good pricing,” said Chakravarti.
FY24’s incremental fundraise is just about 4 per cent higher than compared to FY23’s total borrowings of ₹1,57,906-crore. Seen against the borrowing programme of the earlier fiscal (FY22) which totalled to ₹1,14,497-crore, there seems to be a reasonable amount of rationalisation in mobilising liabilities.
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