To oil its fast-paced expansion and the resultant expansion of its loan book, affordable segment-focused Shriram Housing Finance has secured an additional Rs 300 crore equity capital from the parent Shriram City Union Finance, taking its total equity capital to about Rs 1,100 crore.
The company has set a target of crossing Rs 5,600 crore of assets under management (AUM) target by March, as it had already crossed the Rs 4,000-crore mark in July and the new growth capital will help it expand the balance sheet faster.
For the Shriram Group's housing finance company, this is the second round of equity capital infusion; and with this, the total equity infusion in FY22 so far stands at Rs 500 crore and since the launch at Rs 1,088 crore. The capital infusion will enable the mortgage lender to expand its balance sheet faster by growing its loan book.
"This capital infusion will increase the holding of Shriram City Union in the company to 85.02 per cent," Ravi Subramanian, managing director and chief executive of Shriram Housing Finance, told PTI on Wednesday.
He said affordable housing and mid-market segments are witnessing strong demand from small towns, and the capital infusion will be utilised to fund the rising demand for home loans.
The company has ambitious plans to expand its distribution with a primary focus on cross-selling through the Shriram Group network to Shriram customers in Andhra and Telangana.
The capital will also be utilised to fund the expansion plans in the targeted regions.
He said that with this round of recapitalisation, the company's net worth has also increased to Rs 1,088 crore with this investment from Rs 788 crore in June 2021.
Subramanian added that this capital infusion will help the company expand its footprint and enhance growth potential, and this is also a reinforcement of the group's faith in the company's transformed business model.
"We would continue to build on our core strengths and maintain our growth trajectory. This would also help us outperform competition both on business volume and collection efficiency," he added.
On the growth so far this fiscal, he said loan sales have been robust with an annualised growth of 60 per cent, driven by rising demand for affordable home loans. "We are on track with our expansion plans in Andhra and Telangana and that will help us meet our full-year AUM target of Rs 5,600 crore the fiscals."
Earlier, in an interview with PTI, Subramanian had said the city-based affordable housing focused lender, which is one of the three credit business verticals of the Chennai-based Shriram Group, closed FY21 with a loan book of Rs 3,923 crore, which despite the pandemic washout had crossed Rs 4,000 crore in end-June.
This means the company plans to add more than 1.5x times its present book over the next 30 months, he had said.
According to the plan, the loan book, which has already crossed Rs 4,000 crore as of the June quarter, should touch Rs 5,000 crore by December and close the year at around Rs 5,600 crore, and reach Rs 8,000 crore in FY23 and top Rs 10,000 crore by FY24, he had said.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Best Autumn And Winter Escapes Across The World
Whether you’d rather take to the slopes or relax by the pool, Holly Kirkwood has the pick of autumn and winter escapes across the world
Duran Duran – Forty Years Later
Duran Duran are back with their fifteen studio album Future Past
America Can't Ignore Afghanistan
Exclusive: Pakistani Prime Minister Imran Khan says the Taliban can be a partner for peace, not a terrorist threat - if the U.S. stays engaged.
Big Sky's Moment of Glory
The most rugged resort in Montana gets speedy lifts, luxury hotels, and fine dining to match its extreme slopes
Black Hairstyles Need Protection
In most U.S. states, employers and schools are allowed to discriminate against box braids, locs, and other traditional styles. A coalition of activists and legislators has started to change that.
De-radicalizing the Extremists
Parents for Peace enlists ex-believers to help families win back loved ones drawn to Islamism, QAnon, and other ideologies. Demand has never been higher
Down to Their Last Dollar
Businesses fail every day, from world-beaters (like TWA and Lehman Brothers) to sexy high-fliers (DeLorean, Enron) to Steady Eddie, old-school icons (Toys “R” Us, Sears). Sometimes, of course, market conditions simply turn Sisyphean. But often, when that boulder starts to roll backward, a leader’s grit, imagination, resourcefulness, and ability to conjure a little luck can mean the difference between a brave new chapter and, well, Chapter 11. Here, four businesses that went from nearly bust to total gangbusters.
How Delane Parnell Beat the Game at Its Own Game
He was the living embodiment of the American Dream, a tireless entrepreneur who fought his way from Detroit’s meanest streets. Then Delane Parnell faced the moment that would define his gaming venture—and his life.
Farming Grows Up
A group of startups raises lettuce, tomatoes, and berries in high-rise plant factories. The founders aren’t farmers; they’re technologists who have shown that even the most grounded industry can be radically reinvented.
XGIMI – A Potent Portable
Even as TVs grow ever-larger, the projector category continues to be an active one, with more recent designs like ultra-short throw models giving viewers an alternative to room-dominating hangfrom-ceiling setups.