Shriram Transport will raise Rs 2,500 crore via a Qualified Institutional Placement or QIP and warrant issue. The promoter will participate by giving Rs 500 crore. Umesh Revankar, MD, Shriram Transport Finance discussed the plans post this equity raise and the overall company outlook.

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Explaining the rationale to raise funds, he said, “Last year during the first wave of COVID-19, we thought we need to raise equity and the shareholders had approved Rs 4,000 crore and subsequently we had raised Rs 1,500 crore through rights and balance Rs 2,500 crore we felt we will raise as and when it required through the different instrument. We want to execute that now. The approval was already there.”

“The second wave of COVID-19 has come back and we felt that whatever provisioning we have made till now, of Rs 2,600 crore, may fall short,” he added.

There has been good demand from domestic institutional investors and foreign long-only investors for the issue. according to the company.

The collections in April were around 92 percent – 5-6 percent less than the normal collection – and in May it was around 87-88 percent. However, Revankar believes the June collection should be definitely better.

“May it was down. June we should be able to recover well. August and September, I feel, the market will come back strongly,” added Revankar.

The challenge has been more on the disbursement side in May as almost all government offices were closed.

"Whatever was the pipeline for the month of March and April, we continue to disburse that in May. The demand is reasonably good, we are able to see the demand but it is getting postponed. This quarter, the disbursement will be much lower than Q4 but we are not worried about it,” he explained.

For the full interview, watch the accompanying video.

(Edited by : Abhishek Jha)

First Published:Jun 14, 2021 12:12 PM IST