To facilitate a hassle-free merger of Shriram City Union Finance (Shriram City) with Shriram Transport Finance (STFC), the former has started a pilot project to train employees to cross-sell STFC products.
The project, currently being carried out in around 50 branches, will be expanded to all branches and continue till the merger is completed, YS Chakravarti, MD & CEO, Shriram City, told a select group of media persons.
“The merger process with STFC, the market leader in used truck finance, is progressing as per plans and is expected to be completed by December 2022, which will give us a competitive edge,” Chakravarti said.
Shriram City’s board had approved the amalgamation of the company with STFC on December 13, 2021.
Chakravarti said the merger process is awaiting approvals from IRDA, NCLT and shareholders. The merged entity will be known as Shriram Finance. It has received approvals from BSE, NSE and most of the company’s lenders. “We will be able get approval from NCLT by June-end,” Chakravarti said.
Shriram City provides vehicle, personal, MSME, gold loans and investment options, whereas STFC is into consumer finance, life insurance, general insurance, stock broking and distribution.
On a standalone basis, Shriram City reported its best yearly disbursements of Rs 26,140 crore in FY22, up 52.4%. Assets under management (AUM) rose 12% to Rs 33,186 crore. While profit after tax rose 7.4% to Rs 1,086 crore, the company has liquidity back-up worth Rs 5,235 crore as of December 2021.
“FY22 started on a slow note, but we managed to pick up significant pace with the improving conditions for MSMEs and pent-up demand. Within the MSME space, we largely cater to the trading community and they have rebounded with the pick-up in activity, thus spurring demand for MSME credit,” Chakravarti said.
In FY22, MSME and personal loan disbursements grew at the fastest pace, driving overall growth for the company. MSME loans contributed 44% of total AUM and disbursements more than doubled to Rs 6,972 crore. The company has expanded its gold loan business to 70 branches in north India and will focus on capturing market share from the unorganised sector in the region.