Shriram Finance Consolidates Green Finance Business Under One Brand Name

Shriram Finance Ltd. is consolidating all its green financing initiatives under Shriram Green Finance, dedicated to funding initiatives beyond electric vehicles. The company aims to achieve an assets under management of Rs 5,000 crore within the next three-four years for the vertical. 

The green finance business is being consolidated with a vision to build a green finance portfolio through financing EVs, battery charging stations, renewable energy products and solutions, and energy efficient machinery. Shriram Green Finance will raise global and domestic funds which are focused on green investments for onward lending to its constituency. 

“By creating a separate vertical, there will be a dedicated focus, which will help build volumes. Green financing interest rates will be 100-200 basis points lower, and we will look to raise resources at a lower rate once we build a sizable portfolio,” Umesh Revankar, executive vice chairman, Shriram Finance, told NDTV Profit.

Shriram Green Finance will initially focus on building the EV portfolio across India, with initial focus on Karnataka, Kerala, National Capital Region and Maharashtra. Shriram Finance is actively engaging with original equipment manufacturers producing EVs to establish long-term partnerships, to ensure seamless and accessible vehicle financing solutions.

India's electric vehicle sector is undergoing rapid expansion, driven by ambitious government policies, technological advancements, and growing environmental awareness. The EV sales and charging infrastructure sector is growing rapidly as well, with fast-charging and battery-swapping technologies being prioritised to enhance convenience.

While India’s energy efficient machinery segment is still at a very nascent stage, India’s renewable energy sector has experienced remarkable growth over the past decade, driven by ambitious government initiatives and a growing focus on sustainability. All these present an opportunity for Shriram Finance, the company said in a release. 

The company is also looking to increase its focus on Small and Medium Enterprises lending and gold loan business. Revankar said, “There is no change in the SME portfolio. Cash flow mismatch keeps happening, which causes some delays, but it's not a cause of concern".

In the gold loan business, the company's aim is to reach nearer to the customers, like traditional pawn brokers are, he said. "Currently, we have 1,500 locations for gold loans and we aim to gradually increase the locations.”