Shriram Transport Finance to expand into rural areas

Chennai, July 25 (IANS) Used truck financier Shriram Transport Finance Company is planning to expand its network to rural India where it sees good demand growth.

"Currently the company has around 200 centres and plans are there to increase the number as there is good business potential for used trucks in these areas," Umesh Revankar, managing director, said as the company hit the market Wednesday with a non-convertible debenture (NCD) issue to raise Rs.600 crore.

Revankar told reporters here that the rural centres, managed basically by company employees, will be in addition to 502 branches the company has.

About the truck market, he said the slowdown was seen only the heavy commercial segment while the small vehicle segment was logging around 15 percent growth.

"The market for used commercial vehicles is also good," Revankar added.

He said Shriram Transport planned to raise a total of Rs.600 crore issuing NCD each with a par value of Rs.1,000 for lending, investments and paying off debts.

He said the issue closes on Aug 10. The minimum investment is Rs.10,000 and the company has obtained permission to issue debenture certificates to those investors who do not have a demat account.

The NCDs offer a return of 11.25 percent for 36 months tenor and 11.40 percent for 60 months tenor.