Shriram Finance prepares to secure Rs 20,000 crore in FY27 to fuel loan growth and scale its EV financing portfolio to Rs 5,000 crore.
Shriram Finance leverages its recent AAA rating to raise Rs 20,000 crore and expand electric vehicle financing.
Moreover, Shriram Finance is strategically preparing for significant market borrowing during the second quarter of FY27. Consequently, the retail-focused lender intends to secure approximately Rs 20,000 crore to facilitate robust business growth. This strategic move follows a period of muted borrowing activities.
Earlier, the company received a substantial capital infusion from Mitsubishi UFJ Financial Group. Therefore, the firm successfully utilised Rs 20,000 crore for lending purposes. Additionally, it allocated Rs 15,000 crore towards crucial liability repayments. The remaining funds were strategically set aside for general corporate requirements.
Managing Director Parag Sharma recently confirmed these comprehensive financial manoeuvres. He noted that the initial strategy focused on reducing the broader borrowing programme. Now, the institution aims to fully leverage this fresh capital framework. Furthermore, a recent AAA domestic credit rating upgrade provides a distinct advantage.
The lender anticipates this upgrade will decrease incremental borrowing costs significantly. Specifically, expenses are expected to fall by 50 to 60 basis points. Sharma indicated that overall liability costs have already dropped by nearly Rs 200 crore. Consequently, the firm plans to raise capital through retail deposits and bank borrowings.
Domestic capital markets will also play a key role in this diverse funding strategy. Meanwhile, Shriram Finance is aggressively expanding its electric vehicle financing portfolio. The company currently disburses nearly Rs 250 crore monthly for EV financing. This covers electric two-wheelers, passenger vehicles, and rooftop solar installations.
Ultimately, the lender targets an EV loan portfolio of Rs 5,000 crore by FY29. Sharma expressed high confidence in achieving this ambitious target easily. He attributed this optimism to a sharp pickup in the passenger vehicle segment. Moreover, the company remains open to financing light and small commercial vehicles eventually.
(Source: BFSI)
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