Shriram Finance declares ₹15 per share dividend, record date fixed

On Saturday, the company said in a stock exchange filing that “we inform you that the Board of Directors at its meeting held today i.e. December 24, 2022 inter-alia: 1. Declared an interim dividend of 150% i.e. Rs.15/- per equity share of face value Rs.10/- each fully paid up for the Financial Year 2022-23, subject to deduction of tax at source, if any, to be paid to those members whose name appears in the Register of Members of the Company as on Wednesday, January 4, 2023 being the Record Date, for the purpose of payment of interim dividend. The interim dividend payout will be made to eligible shareholders on or after Wednesday, January 18, 2023. 2. Reviewed and approved higher amount(s) for periodical resource mobilisation plan (upto January 31, 2023) including issuance of securities viz. redeemable nonconvertible debentures (‘NCDs’)/subordinated debentures, bonds on private placement basis in tranches or any other methods of borrowing in onshore/offshore market for the purpose of business of the Company to fund the increased credit demand consequent upon merger of erstwhile Shriram City Union Finance Limited into the Company. 3. Approved issuance of redeemable non-convertible debentures/subordinated debentures, bonds or any other structured/hybrid debt securities on private placement basis for purpose of business of the Company upto Rs.35,000 crores, subject to approval of shareholders of the Company. 4. Approved Postal Ballot Notice for seeking shareholders’ approval inter-alia for appointment of new independent directors, appointment of new Managing Director & CEO, re-designation of Vice Chairman & Managing Director as Executive Vice Chairman, payment/revision of remuneration to whole-time directors of the Company, issuance of non-convertible debentures on private placement basis upto Rs.35,000 crores, creation of security in connection with the borrowings by the Board for the purpose of business of the Company upto Rs.2,37,500 crores, etc.”

The largest retail NBFC in India, Shriram Finance Limited (Shriram Finance), stated on Friday, December 23 that its AUM in the combined states of Telangana and Andhra Pradesh had reached INR 33,000 Cr. The company has said in a stock exchange filing that “This has in turn driven up demand for financing of commercial vehicles, micro, small and medium enterprises (MSME) and two-wheelers. Shriram Finance caters to the diversified financial needs of 13,50,000 customers through its 498 branches and over 10,000 employees in the states of AP & TG. The company has a large fixed deposit franchise in AP & TG totalling over INR 2930 Cr, with over 46,000 depositors. The growth strategy for the Company will be focused on driving the self-employed and the MSME economy.” With a strong net worth of ₹37,500 crore and assets under management (AUM) of ₹1,71,000 crore, Shriram Finance is a diverse player that serves over 67 lakh customers throughout India (as of Sep-22).

Commenting on the growth strategy for Andhra Pradesh (AP) and Telangana (TG), Shriram Finance said in an official announcement that “The top 5 products for the company in the region are financing of commercial vehicles, MSMEs, two-wheelers, Gold Loans and Personal Loans. The company will provide financial services to the underbanked and underserved and expand its reach within this segment of customers. The focus will be to increase penetration among the self-employed segment, specifically those who lack formal income proof and need capital to expand their small businesses. Currently, with 498 branches in AP & TG, Commercial vehicle loans are offered in 268 branches, while 2W, MSME, gold loans and Personal loans are offered in 230 branches. The company plans to roll out loans towards CV in 170 new branches totalling 438, 2W in 80 new branches totalling 310, Gold loans in 260 new branches totalling 490, MSME in 208 new branches totalling 438 and Personal loans in 60 new branches totalling 290 by Mar-23. The plan is to roll out all products in all branches by 2023 end.”

Mr YS Chakravarti, MD & CEO, Shriram Finance commented, “Shriram Finance is the lender to the Aam Aadmi and our strategy is to focus on the self-employed and MSME segment in the 2 states. MSMEs suffer from the high cost of credit and often lack timely access to capital. There is inadequate capital infusion compounded by insufficient data on credit requirements. We specialise in understanding this segment and their credit needs.”

Mr K Srinivas, Jt MD, Shriram Finance speaking at the event said, “The 2 companies Shriram Transport & Shriram City have come together to form Shriram Finance and we have pooled together our strengths and will look at capitalising on each other’s potential in the next 1 year. The states of AP & TG are among Shriram Finance’s top 5 most important states and will continue to drive growth for the company. We will focus on the MSME lending segment, which has impressive potential but faces financial challenges to growth, which we intend to plug.”

On Friday, the shares of Shriram Finance Ltd closed on the BSE at ₹1300.90 apiece, down by 3.21% from the previous close of ₹1339.00. The stock recorded a total volume of 12,237 shares compared to the 20-Day average volume of 27,045 shares. The stock had touched a 52-week-high of ₹1,509.25 on (25/07/2022) and a 52-week-low of ₹1,002.50 on (08/03/2022). For the quarter ended September or Q2FY23, the company posted a promoter shareholding of 29.37% and a public stake of 70.63%. On a YTD basis, the stock has rallied 3.65% so far in 2022.