Shriram Finance to foray into new segments, offer niche products
The Hindu
The average ticket size of loan would be between ₹10 lakh and ₹30 lakh and had the potential to fetch about ₹10,000 crore in four to five years’ time
Shriram Finance Ltd. (Shriram Finance) is planning to make a foray into new segments such as supply chain funding and education loan to offer a slew of niche products to its customers, said a top official.
“We are a new entrant and are trying to offer new products,” said Y. S. Chakravarti, MD & CEO adding that the niche products would not be more than 10% of company’s assets under management (AUM).
As per the plan, first in the line would be the launch of supply chain funding project next month, followed by education loan either by the end of FY23 or early FY24. It would be tested for six months.
According to him, company would like to start supply-chain funding to help a manufacturer or large distributor and his supply chain eco-system that contains a number of vendors.
The average ticket size of loan would be between ₹10 lakh and ₹30 lakh and had the potential to fetch about ₹10,000 crore in four to five year’s time. The educational loan portfolio would be about ₹5,000 crore, he said.
Explaining about the future goals of new entity, he said that they were aiming to grow AUM at 15% compound annual growth rate for next three years, have gross non-performing assets at 6-7%, net NPA at 3-4% and net interest margin of 8-9%.
After the merger of Shriram Transport Finance with Shriram City Union Finance, Shriram Finance reported AUM of ₹1,71,000 crore, of which Tamil Nadu accounted for ₹30,000 crore.
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