Shriram Transport Finance Limited (STFC), India’s Commercial Vehicle Financier and Shriram City Union Finance Ltd. (SCUF), India’s diversified NBFC in the underserved segment and their Promoter entity Shriram Capital Limited (SCL) announced that the boards of directors of STFC, SCUF & SCL, at their respective board meetings held on 13th December 2021, approved the merger of SCL & SCUF with STFC.
The merger is subject to the approval of shareholders of SCL, SCUF and STFC respectively, regulatory approvals of RBI, CCI, IRDA, NHB, NCLT and such other regulatory approvals as may be required, according to the statement.
The merger would help the group bring together all its lending products – Commercial vehicles, Two-Wheeler Loans, Gold Loan, Personal Loan, Auto Loan & Small Enterprise Finance – under a single roof, thereby creating a financial powerhouse which would end up being a market leader in all the product and consumer segments that it operates in, the statement said.
Commenting on the merger, DV Ravi, MD Shriram Capital said, “ The merger will enhance our distribution footprint across all business lines without incurring any incremental capex. The benefits likely to accrue due to synergy benefits and the digital initiatives are immense. This merger will also simplify our holding structure eliminating multiple layers.”
Ajay Piramal, Chairman, PEL while endorsing the merger, added, “I am pleased to see the coming together of both lending businesses of Shriram. While they emerge as the largest retail finance NBFC, it also opens up immense opportunities for them with the synergies that transpire. It will be an exciting journey for the group as it creates the appropriate value proposition for the combined customer base of over 2 crores.”
Umesh Revankar, Vice Chairman and MD, Shriram Transport Finance Limited said: “We are thrilled about the unique opportunities this merger will create for our customers, as well as our employees and business partners. Shriram Finance will undoubtedly become the market leader for financial services in rural India.”
Y S Chakravarti, Managing Director and CEO of Shriram City Union Finance Limited expressed his confidence that the group will stay firm on its business model and said, “The Shriram Group has always kept the credit starved segment of customers at the heart of all our products and innovation and we believe this merger is another step towards simplifying and offering our customers solutions to all their financial needs under one umbrella. Being the No.1 in the NBFC space brings with it a tremendous responsibility and we are confident that we will come good on it.”
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