Shriram Finance launches Green Finance vertical; targets Rs 5,000 cr AUM in 4 years
BENGALURU: With increasing demand for electric vehicles and renewable energy products, Shriram Finance, the flagship company of the Shriram Group, on Friday announced the launch of a separate vertical Shriram Green Finance, which will finance a range of sustainable solutions.
This will expand the scope of funding opportunities and we are targeting an Asset Under Management (AUM) of Rs 5,000 crore for this vertical over the next three to four years, senior executives of the company said at a press conference in Bengaluru.
Apart from financing EVs, the portfolio also includes financing battery charging stations, renewable energy products and solutions, energy efficient machinery, among others.
Umesh Revankar, Executive Vice Chairman of Shriram Finance said it has the potential to play a significant role in green financing, as it is growing in recent years.
Also, Shriram Green Finance will raise global and domestic funds that are focused on green investments, going forward.
Revankar also pointed out that electric two-wheeler adoption in the country is rising, especially among youngsters.
From the present 5% share of EVs in two-wheeler sales, it will touch 30% over the next three to five years. Currently, the interest rate for EVs is between 14% and 21%. Revankar said they will be providing an interest rate that is 100 to 200 basis points less compared to others.
"Our focus will be on the two-and three-wheeler EV markets. We will also finance SMBs who are into energy efficient machinery and charging infrastructure space," he said, adding Bengaluru has been the hub for innovation and they will launch this vertical in Karnataka, followed by Kerala, NCR and Maharashtra.
YS Chakravarti, Managing Director and CEO of Shriram Finance said that they view sustainability as an essential driver of progress. Shriram Finance is also engaging with OEMs manufacturing EVs to establish long-term partnerships.
Shriram Finance is one of the largest non-banking finance companies (NBFC) with an AUM of over Rs 2.43 lakh crore.