MUMBAI: Chennai headquartered-Shriram Group has received capital markets regulator Sebi’s approval for the merger of its holding company Shriram Capital and Shriram City Union Finance (SCUF) into Shriram Transport Finance (STFC), creating the country’s largest retail NBFC to be christened Shriram Finance.
“The Sebi approval for the merger is through and we expect approvals from IRDAI and RBI in due course before we hit the NCLT for shareholders’ nod,” said Yalamati Srinivasa Chakravarti, MD & CEO of SCUF. Chakravarti, prospective MD & CEO for Shriram Finance, said the merger would be completed by September-October FY23.
“We (Umesh Revankar and Chakravarti) have met and spoken jointly and separately to investors of both the companies and so far we have got a very positive response from all of them. So we don’t anticipate any issue in getting approval from the shareholders,” he said. Highlighting the benefits of the merger, Chakravarti cited results of an internal sample study conducted in the past month that revealed how Shriram Finance would be able to sell each other’s products more effectively.
“We found between 20% and 30% of STFC customers, depending on the states they operate in, were running trucks for their captive use. They are businessmen who use trucks and we felt that’s a segment to which our SME loans can be disbursed. Every customer of STFC would need a two- or four-wheeler for their personal transportation. Here the SCUF SME loan can come in handy. The other product that SCUF has which would be useful to STFC customers would be the gold loan.”
Similarly, he added, “within SCUFs SME customers, we have come across a lot of people using commercial vehicles who could be tapped under the merged entity for STFC products, ie basically commercial vehicle loans. They have a business and for transportation of their goods, they use the commercial vehicles, like rice mill owners who operate trucks for transport.”