IGI Logo

Indian non-banking lender Shriram Finance plans to raise up to $1.5 billion from the overseas market in the current fiscal year in a bid to diversify borrowings, its chief executive told Reuters on Tuesday.

"We are targeting to raise anywhere between $1.25 billion to $1.5 billion (in fiscal year 2024-25)" through a mix of loans and bonds, CEO and Managing Director Y S Chakravarti said.

Of this, the lender has already raised $300 million and is planning to raise another $300 million-$350 million in the next couple of months. The fiscal year ends on March 31.

Last November, India's central bank had asked all lenders to set aside more capital on loans given to non-banking financial companies, such as Shriram Finance, which made raising funds from local banks more expensive.

Analysts have said that non-bank lenders with higher dependency on domestic banks are facing funding constraints following the Reserve Bank of India order.

However, Shriram Finance, which provides loans for buying commercial vehicles and to small and medium sized firms, has not seen any funding pressure due to its higher credit rating and multiple sources of borrowing, Chakravarti said.

"It's the smaller players and the companies that are rated below AA which are getting squeezed. For us, it's not too much of a concern because my entire bank borrowing in my total liability portfolio is about 24%-25%," Chakravarti said.

As of June end, Shriram Finance's loans from banks accounted for 24.8% of its total borrowings, while borrowing via foreign currency loans and bonds accounted for 8.3% and 5.8%, respectively.

The company expects its assets under management to grow around 15%-16% in the quarter ending Sept. 30, slower than the 21% growth in the previous quarter, which was driven by higher lending in the large ticket new-vehicle segment.