The proposed merger of two non-banking financial companies in the Shriram Group — Shriram City Union Finance Ltd. (Shriram City) with Shriram Transport Finance Co. Ltd. (STFC) — is expected to be completed by December, a top company official said.
“The merger process with STFC, the market leader in used truck finance, is progressing as per plans and is expected to be completed by December ‘22, which will give us a competitive edge,” said Y.S. Chakravarti, MD & CEO, Shriram City.
According to him, the merger process is in the last leg and awaiting approvals from NCLT and shareholders. The merged entity will be known as Shriram Finance Ltd.
Shriram City provides vehicle, personal, MSME, gold loans and investment options, whereas STFC is into consumer finance, life insurance, general insurance, stock broking and distribution businesses.
As prelude to the merger process, Shriram City has initiated a pilot project in 40 branches to train its employees to cross sell STFC products. The pilot will be on till the year end. The merger would result in rationalisation of about 400 branches, he said.
On Saturday, Shriram City and Shriram Housing Finance announced that its consolidated net profit for the fourth quarter ended March rose 12% to ₹326 crore, disbursement grew 14% to ₹8,645 crore and Assets Under Management 15% to ₹38,541 crore, backed by strong revival of MSME, gold and two-wheeler loans
Revenue from operations increased to ₹1,900 crore from ₹1,598 crore.
Shriram City Gross non-performing assets (NPAs) declined to 6.31% from 6.37% while net NPAs rose to 3.30% from 3.08%.
