Shriram City Union plans Rs 750 cr NCD

Shriram City Union plans Rs 750 cr NCD 

MUMBAI, August 08, 2011: Shriram City Union Finance Limited, a deposit-accepting NBFC registered with RBI and the largest small enterprise finance company in India, plans to raise monies through the debt capital market on August 11, 2011 with a public issue of Secured Non Convertible Debentures (NCDs) of face value of Rs. 1,000 each. The NCD issue would aggregate up to Rs. 375 crores with an option to retain over-subscription up to Rs. 375 crores for issuance of additional NCDs aggregating to a total of up to Rs. 750 crores.

The NCDs proposed to be issued under this Issue have been rated CARE AA by CARE for an amount of up to Rs. 750 crores, and CRISIL AA-/Stable by CRISIL for an amount of up to Rs. 750 crores. The rating of the NCDs by CARE indicates high degree of safety regarding timely servicing of financial obligations and carrying very low credit risk. The rating of NCDs by CRISIL indicates high degree of safety regarding timely servicing of financial obligations.

The funds raised through this Issue, after meeting Issue expenses, will amongst others, be used for Shriram City’s various financing activities including lending and investments. The funds would also be used to repay the Company’s existing loans and for its business operations including for the capital expenditure and working capital requirements. The NCDs are proposed to be listed on the NSE and the BSE.

JM Financial Consultants Private Limited, A. K. Capital Services Limited and ICICI Securities Limited are the Lead Managers to the Issue while Karvy Investor Services Limited is the Co-Lead Managers to the Issue.

About Shriram City Union Finance Limited:

Shriram City Union Finance Limited, the largest small enterprise finance company in India (Source: The Frost and Sullivan report titled “Analysis of MSME Loan Markets for NBFCs – July 2011”), is a deposit-accepting NBFC registered with RBI, offering (i) small enterprise finance, (ii) financing for two wheelers, appliances and other commercial goods, (iii) pre-owned and new vehicle loans, (iv) personal loans and (v) loans against gold.

Established in 1986, Shriram City has a track record of twenty five years in the financial services sector in India. Since 2005 the Company has focused on the retail financing segment. The Company has a dominant share of 95% in the small loan segment (loans of amount less than Rs. 10 lakh) and also leads the total Indian micro, small and medium enterprises market with 53% share, (source: The Frost and Sullivan report titled “Analysis of MSME Loan Markets for NBFCs – July 2011”). . Over the last 25 years the Company has established a pan-India presence, with 559 branches and 91 other business outlets as of March 31, 2011, across 17 states in India, with a significant presence in south India. As on March 31, 2011, the total employee strength of the Company was 2,318. Shriram City’s business outlet networks are interconnected and each business outlet is connected to its head office through an ERP platform.

The Company’s total income increased from Rs. 34,805.91 lakhs in fiscal 2007 to Rs. 132,091.19 lakhs in fiscal 2011. The Company’s net profit after tax increased from Rs. 5,162.16 lakhs in fiscal 2007 to Rs. 24,058.85 lakhs in fiscal 2011. The Company’s Assets Under Management have grown from Rs. 250,686.49 lakhs as of March 31, 2007 to Rs. 799,804.88 lakhs as of March 31, 2011. The Company’s capital adequacy ratio as of March 31, 2011 computed on the basis of applicable RBI requirements was 20.53%, compared to the RBI stipulated minimum requirement of 12.00% as on the date.