The proposed merger of two non-bank finance 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 senior company official said.
“The merger process with STFC, the leader in used vehicle financing, is proceeding according to plan and is expected to be complete by December 22, giving us a competitive advantage,” said YS Chakravarti, MD & CEO, Shriram City.
According to him, the merger process is in its final stages and awaiting approval from NCLT and shareholders. The merged company will be known as Shriram Finance Ltd. be known.
Shriram City offers vehicle, personal, MSME, gold loans and investment options while STFC is engaged in consumer finance, life insurance, general insurance, stock brokerage and distribution businesses.
To kick off the merger process, Shriram City has launched a pilot project in 40 stores to train its employees to cross-sell STFC products. The pilot will run until the end of the year. The merger would result in a rationalization of around 400 stores, he said.
On Saturday, Shriram City and Shriram Housing Finance announced that their consolidated net income for the fourth quarter ended March was up 12% to £3.26 billion, disbursements were up 14% to £8,645 billion and assets under management up Up 15% to £38,541bn, helped by strong pickups in MSME, gold and two-wheeler lending
Operating income increased from ₹1,598 billion to ₹1,900 billion.
Shriram City’s gross non-performing assets (NPAs) decreased to 6.31% from 6.37%, while net NPAs increased to 3.30% from 3.08%.