Shriram Capital will subscribe to 23 lakh equity shares and 59 lakh warrants being issued by SCUFL at a price band of R570 a share.
It is believed that Shriram Capital, through its subsidiaries called Shriram Enterprise Holdings and Shriram Retail Holdings, is holding little over 53% indirectly in Shriram City Union Finance. Shriram City Union, at a board meeting on Monday, decided to issue 23 lakh equity shares afresh at a price band of R570 a share and 59 lakh warrants at an exercise price of R570 a warrant (to be converted over a period of 18 months).
An EGM has been called to seek shareholders' approval on March 24.
R Kannan, managing director of Shriram City Union,
told the FE: "We are raising fresh funds from our holding company to meet our working capital requirements as well as to grow aggressively across the country. We expect that Shriram Capital will subscribe 23 lakh fresh equity shares on or before March this year and warrants during next financial year."
To a question, he said: "We are growing at a healthy rate of 35-40% annually and we hope our total assets under management will cross R15,000 crore by the end of this financial year against R11,500 crore as of December 2011. We hope to at least maintain 25-30% growth every year and the proposed funds will be utilised to meet our business growth."
"The funds will be utilised across all the segments including in SMEs financing, which is growing at 35% to 40% annually, followed by two-wheelers (20% growth) and gold loans (20% growth). We hope to report a good profitable growth in the current financial year too," Kannan said.
According to him, part of the funds, if required, will be also utilised to meet the growing demand of its housing finance subsidiary. The company has infused R20 crore into the subsidiary so far.