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Shriram Finance
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Company History
Shriram Finance Limited (formerly known as Shriram Transport Finance Company Limited) is the flagship company of Shriram Group, a diversified group with interests in financial services viz. Commercial vehicle finance, Consumer Finance, life and general insurance, stock broking, chit funds and distribution of financial products such as life and general insurance products and units of mutual funds. The Company is primarily engaged in the business of financing commercial vehicles, passenger vehicles, construction equipment, farm equipment, micro, small and medium enterprises, two-wheelers, gold and personal loans. The Company is a leader in organised financing of pre-owned commercial vehicles and two-wheelers. It has vertically integrated business model and finances passenger vehicles, Construction Equipment, Farm Equipment, MSMEs Gold, Personal loan and Working Capital Loans, among others.
Shriram Finance Limited was incorporated on June 30, 1978 as a Public Limited Company. The Company was formed to provide hire purchase and lease finance for the medium and heavy commercial vehicles. In year 1993, the Company launched lease Portfolio Management Scheme and managed more than 100 crore of business through this Scheme.
In March 1995, the company came out with a rights issue of 64.95 lakh equity shares aggregating Rs 6.49 crore. The issue was to augment long-term resources and working capital and to enhance the leverage ability of the company. In the span of 20 years, the company had fortified their presence in the market, on account of their focused business segment, a wide geographical coverage, an effective credit monitoring and appraisal system, which has resulted in high growth in business and profitability.
During the year 2003-04, the company increased the windmills capacity from 4,450 kwh to 8,650 kwh for producing electricity. During the year 2005-06, the undertaking of Shriram Investments Ltd and Shriram Overseas Finance Ltd was amalgamated with the company with effect from the appointed date April 1, 2005. Also, they increased the windmills capacity from 8,650 kwh to 23,180 kwh.
During the year 2006-07, the company made a tie up with UTI Bank for issue of co-branded credit cards, with several safety features, on the VISA platform, exclusively to the truck operators. Also, they entered into a shareholders' agreement with Ashok Leyland Ltd and their associates for purchase of 40% stake in Ashley Transport Services Ltd.
In February 8, 2007, the company incorporated a 100% subsidiary, namely Shriram Powergen Ltd to deal with the windmill and the biomass projects of the company. During the year 2007-08, due to economic conditions and other business exigencies the company retained the business with them and disposed off their entire shareholding in their wholly-owned subsidiary company.
During the year 2007-08, the company opened their own branches across 72 locations. They also extended their operations to financing of passenger commercial vehicles, second-hand tractors and construction equipment during the year. During the year 2008-09, the company opened 49 branches across India. They also strengthened their core knowledge verticals relating to product, Territory and Customer.
During the year 2009-10, the company purchased hypothecated loan outstanding of CVs and construction equipment of GE Capital Services India and GE Capital Financial Services aggregating to approximately Rs 1,100 crore. They introduced touch screen kiosks (one Stop) as a replacement for their successful campaign - 'truck Bazaars'.
In June 22, 2009, the company acquired the entire paid up capital of Shriram Equipment Finance Pvt Ltd and consequently Shriram Equipment Finance Pvt Ltd became a 100% subsidiary of the company. But, they sold their entire investment of Rs 5 lakh during the year itself and consequently Shriram Equipment Finance Pvt Ltd ceased to be the subsidiary company.
In December 15, 2009, the company incorporated a wholly owned subsidiary company namely, Shriram Equipment Finance Company Ltd and in February 11, 2010, they incorporated Shriram Automall India Ltd as a wholly owned subsidiary.
In 2010, Shriram Transport Finance Company successfully raised Rs 584 crore through Qualified Institutional Placement with domestic and international investors. During the year, the company initiated financing of construction equipment.
In 2011, Shriram Transport Finance Company introduced Shriram Automalls - a dedicated platform for trading of pre-owned trucks at a fair value. In 2013, Shriram Transport Finance Company's assets under management crossed Rs 50000 crore.
In 2015-16, global credit rating agency Fitch upgraded long term issuer ratings to IND AA+' from IND AA'. Another credit rating agency CRISIL upgraded its rating on long-term debt instruments and bank facilities, and fixed deposits of Shriram Transport Finance Company to 'CRISIL AA+/FAAA/Stable' from 'CRISIL AA/FAA+/Positive. During the year, Shriram Equipment Finance Company Ltd (SEFCL), a wholly owned subsidiary of Shriram Transport Finance Company, was merged with Shriram Transport Finance Company.
In 2016-17, Shriram Transport Finance Company successfully raised Rs 13.5 billion through issuance of Masala Bonds' - Senior Secured Rupee Denominated Bonds' listed on Singapore Stock Exchange.
On 24 January 2018, Shriram Transport Finance Company Limited (STFC), Shriram Automall India Limited (SAMIL) and MXC Solutions India Private Limited (CarTrade) entered into definitive agreements that will result in the combination of the two businesses creating India's leading used vehicle platform. CarTrade, India's leading online automotive business will acquire majority stake in Shriram Automall India Limited (SAMIL), India's No.1 physical auction platform for pre-owned vehicles from STFC. SAMIL is a wholly owned subsidiary of STFC. CarTrade gets majority equity stake by paying Rs 156.37 crore to STFC as consideration for acquisition of shares of SAMIL. Further SAMIL will acquire 100% equity in Adroit Inspection Services Pvt. Ltd. from CarTrade by paying Rs 13 crore as consideration.
During FY2019, the total Assets Under Management(AUM) had increased from Rs. 9,6252.98 crore to Rs. 104482.28 crore. During 2018-19, the Company securitised its assets worth Rs. 15123.05crore(accounting for 14.47% of the total assets under management as on 31 March 2019) as against Rs. 12467.16 crore during 2017-18.
During the year 2018-19, the Company through Shelf Prospectus dated 22 June 2018 offered 5,00,00,000 Secured Redeemable Non-Convertible Debentures (NCDs) of face value of Rs. 1,000 each to the Public for an amount aggregating upto Rs. 5,00,000 lacs pursuant to the Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 as amended. The Company under the Shelf Prospectus and three Tranche Prospectuses issued and allotted 4,79,26,294 NCDs aggregating to Rs. 479,262.94 lacs. Utilisation of funds raised were as per the objects of the Public Issue of NCDs. The said NCDs are listed on the National Stock Exchange of India Limited and BSE Limited.
During the FY2020, the total Assets Under Management had increased to Rs.109,749.24 crore from Rs.104,482.29 crore. During 2019-20, the Company securitized its assets worth Rs. 16,581.13 crore (accounting for 15.11 % of the total assets under management as on 31 March 2020) as against Rs. 15,123.06 crore during 2018-19.
During the year 2019-20, the Company through Shelf Prospectus dated 09 July 2019 offered 10,00,00,000 Secured Redeemable Non-Convertible Debentures (NCDs) of face value of Rs. 1,000 each to the Public for an amount aggregating up to Rs.10,000 crore.
As on 31 March 2020, the company had a distribution network of 1758 network branches across the country.
During the Financial Year 2020-21, the Company securitized its assets worth Rs. 13,622 crores of the total assets under management.
During the Financial Year 2021-22, the Company securitized its assets worth Rs. 12,880.16 crores of the total assets under management. The outstanding direct assigned portfolio stood at Rs. 1,341.83 crores as on March 31, 2022.
On June 12, 2021, the Company allotted 13,986,000 Equity Shares of face value Rs.10 each to eligible qualified institutional buyers at the Issue Price of Rs. 1,430/- per Equity Share (including a premium of Rs. 1,420/- per Equity Share), aggregating to Rs. 19,999,980,000/- under the QIP issue.
During the year 2022-23, the amalgamation of Shriram Capital Limited (SCL) with its Remaining undertaking with Shriram Transport Finance Company Limited (the Holding Company) and amalgamation of Shriram City Union Finance Limited (SCUF) with its entire undertaking with the Company through Composite Scheme of Arrangement became effective from April 01, 2022 and accordingly, the name of the Company was changed from 'Shriram Transport Finance Company Limited' to 'Shriram Finance Limited' with effect from November 30, 2022.
During the Financial Year 2022-23, the Company securitised its assets worth Rs. 16,965.25 crores (accounting for 9.14% of the total assets under management as on March 31, 2023).
Shriram Finance Share Price
Shriram Finance share price reflects investor sentiment toward the company and is impacted by various factors such as financial performance, market trends, and economic conditions. Share price is an indicator which shows the current value of the company's shares at which buyers or sellers can transact.
Shriram Finance Market Cap
Market capitalization of Shriram Finance indicates the total value of its outstanding shares. Marketcap is calculated by multiplying share price and outstanding shares of the company. It is a helpful metric for assessing the company's size and market Valuation. It also helps investors understand how Shriram Finance is valued compared to its competitors.
Shriram Finance PE Ratio
Shriram Finance PE ratio helps investors understand what is the market value of each stock compared to Shriram Finance 's earnings. A PE ratio higher than the average industry PE could indicate an overvaluation of the stock, whereas a lower PE compared to the average industry PE could indicate an undervaluation.
Shriram Finance PEG Ratio
The PEG ratio of Shriram Finance evaluates its PE ratio in relation to its growth rate. A PEG ratio of 1 indicates a fair value, a PEG ratio of less than 1 indicates undervaluation, and a PEG ratio of more than 1 indicates overvaluation.
Shriram Finance ROE (Return on Equity)
Return on Equity (ROE) measures how effectively Shriram Finance generates profit from shareholders' equity. A higher ROE of more than 20% indicates better financial performance in terms of profitability.
Shriram Finance ROCE (Return on Capital Employed)
Return on Capital Employed (ROCE) evaluates the profitability of Shriram Finance in relation to its capital employed. In simple terms, ROCE provides insight to investors as to how well the company is utilizing the capital deployed. A high ROCE of more than 20% shows that the business is making profitable use of its capital.
Shriram Finance Total Debt
Total debt of Shriram Finance shows how much the company owes to either banks or individual creditors. In simple terms, this is the amount the company has to repay. Total debt can be a very useful metric to show the financial health of the company. Total debt more than equity is considered to be a bad sign.
Shriram Finance Debt to Equity Ratio
The Debt-to-Equity (DE) ratio of Shriram Finance compares its total debt to shareholders' equity. A higher Debt to Equity ratio could indicate higher financial risk, while a lower ratio suggests that the company is managing its debt efficiently.
Shriram Finance CAGR (Compound Annual Growth Rate)
CAGR shows the consistent growth rate of Shriram Finance over a specific period, whether it is over a month, a year, or 10 years. It is a key metric to evaluate the company’s long-term growth potential. Main metrics for which CAGR is calculated are net sales, net profit, operating profit, and stock returns.
Shriram Finance Technical Analysis
Technical analysis of Shriram Finance helps investors get an insight into when they can enter or exit the stock. Key components of Shriram Finance Technical Analysis include:
Support Levels (S1, S2, S3)
There are usually multiple support levels, but the main support levels for a stock are S1, S2, S3. Support levels indicate price points where stock might get support from buyers, helping the stock stop falling and rise.
Resistance Levels (R1, R2, R3)
There are usually multiple resistance levels, but the main resistance levels for a stock are R1, R2, R3. Resistance levels represent price points where Shriram Finance shares often struggle to rise above due to selling pressure.
Shriram Finance Dividends
Dividends refer to the portion of the company’s profits distributed to its shareholders. Dividends are typically paid out in cash and reflect Shriram Finance ’s financial health and profitability.
Shriram Finance Bonus Shares
Bonus shares are usually given by companies to make the stock more affordable, increase liquidity, boost investor confidence, and more.
Shriram Finance Stock Split
Stock split increases the number of its outstanding shares by dividing each existing share into multiple shares. When the company offers a stock split, the face value of the stock reduces in the same proportion as the split ratio.
Shriram Finance Financials
The financials of Shriram Finance provide a complete view to investors about its net sales, net profit, operating profits, expenses, and overall financial health. Investors can analyze financial data to assess the company’s stability and also understand how the company has been growing financially.
Shriram Finance Profit and Loss Statements
The profit and loss statement of Shriram Finance highlights its net sales, net profit, total expenditure, and operating profits in the current financial year. This Profit and Loss statement is crucial for evaluating the profitability and financial stability of Shriram Finance .
Shriram Finance Balance Sheet
The balance sheet presents a snapshot of Shriram Finance ’s assets, liabilities, and equity of shareholders, providing insights into the financials of the company.
Shriram Finance Cashflow Statements
Cashflow statements track the company's cash inflows and outflows over a period. It is an essential tool for understanding how well the company manages its liquidity and finances.
Shriram Finance Net Interest Margin (NIM)
Shriram Finance Net Interest Margin (NIM) tells about the profitability earned by all NBFCs and financial institutions. It represents the income generated by the bank from the difference between the interest earned on loans and the interest paid on public deposits. Net Interest Margin (NIM) is a metric that monitors the profitability generated from a bank's lending activities.
Shriram Finance Non-Performing Assets (NPA) Ratio
Non-Performing Assets (NPA) indicate the ratio of a bank's loans that are classified as non-performing. A lower NPA ratio reflects stronger asset quality and more effective risk management.
Shriram Finance Capital Adequacy Ratio (CAR)
Capital Adequacy Ratio (CAR) is a metric to measure the bank's ability to absorb losses and still remain financially stable. A higher CAR shows that the bank is financially sound and can absorb potential losses.
Shriram Finance Gross NPA
Gross NPA is the percentage of total non-performing loans before provisioning, while net NPA is the percentage after provisioning. Lower gross and net NPA ratios indicate better loan quality.
Shriram Finance Net NPA Ratio
Net NPA is the actual losses a bank has incurred due to NPA accounts. Lower the NPA, better the banks can maintain stable income from interest on loans.
Shriram Finance CASA Ratio
CASA ratio tells how much of a bank's total deposits are in both current and savings accounts.
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SEBI REGISTERED RESEARCH ANALYST REGISTRATION NUMBER: INH000015729Disclaimer: "Investments in securities are subject to market risks. Read all the related documents carefully before investing." Receiving registration from SEBI and certification from NISM does not assure the performance of the intermediary or guarantee returns to investors in any manner. Compliance Email: [email protected]
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