Shriram Finance Top Executive Says Plans Afoot To List Both Insurance Arms In Two Years

Shriram Finance Ltd. plans to list its general and life insurance subsidiaries in the next two years, Executive Vice Chairperson Umesh Revankar said on Tuesday.

Shriram General Insurance will list first and then Shriram Life Insurance, according to Revankar. "Both are doing very well, and we have not added any capital to both of these companies."

"Both general and life insurance arms, we will be looking to list in one or two years from now. But we first need to reach the scale," Revankar told NDTV Profit, on the sidelines of an event announcing former cricketer Rahul Dravid as the company's brand ambassador.

Shriram Group houses both Shriram General Insurance and Shriram Life Insurance in a joint venture with South African company Sanlam.

After receiving an in-principle approval from the Reserve Bank of India on its asset reconstruction business, the group is also planning to foray into primary dealership business.

"Application is made...PD is something we thought we can do because we also deal with a lot of transactions. It doesn't really require large infrastructure. You need two–three specialists and you build around it. We can expect a licence maybe in the next six months' time," Revankar said.

When asked if investment banking is on the cards, Revankar said the group has not thought about it as of now.

On the company's marketing expenditure and why it feels the need to push customers now, Revankar said it is present in new markets, but everyone recognises it as a vehicle financier.

On its fundraising plans, Revankar said the non-banking finance company plans to raise about $750 million through its first tranche of the $1 billion fundraising plans through overseas markets.

While he did not provide the timeline of its overseas fundraising plans, he said the company was not in a hurry to raise funds and it could be a mix of loans and bonds. "One advantage available at the overseas markets is that you can raise funds in one shot even though there is a hedging cost, and it is slightly expensive, but we benchmark it to the domestic market," he said.

The RBI regulations allow financial institutions to raise up to $750 million through external commercial borrowing under the automatic route.

While the deposit-taking NBFC intends to maintain its loan growth target for the current financial year at over 15% on year, its deposits have been growing fairly, Revankar said.

"Loan growth depends upon economic activity. Right now, monsoon and economic activity are positive. As long as this continues, we will be growing more than 15% on-year as we have guided," he said.

On deposits, Shriram Finance has been growing fairly well because of its large network of branches. Revankar said deposits have been healthy and he does not see any challenges to garner deposits.

For the quarter ended June, the company's assets under management rose nearly 21% to Rs 2.33 lakh crore.