Shriram Finance's AUM touches Rs 33,000 cr in AP, TS

Hyderabad Shriram Finance Limited, India's largest retail NBFC announced that the assets under management (AUM) of the company in the states of Andhra Pradesh and Telangana combined touched Rs 33,000 crore. The growth has been on the back of an economic turnaround, rural markets revival and pick up in infrastructural activity. This has in turn driven up demand for financing of commercial vehicles, micro, small and medium enterprises (MSME) and two-wheelers.

Shriram Finance caters to the diversified financial needs of 13.5 lakh customers through its 498 branches and over 10,000 employees in the two Telugu states. The company has a large fixed deposit franchise in both States totalling over Rs 2930 crore, with over 46,000 depositors. The growth strategy for the Company will be focused on driving the self-employed and the MSME economy.

The top five products for the company in the region are financing of commercial vehicles, MSMEs, two-wheelers, gold loans and personal loans. The company will provide financial services to the underbanked and underserved and expand its reach within this segment of customers. The focus will be to increase penetration among the self-employed segment, specifically those who lack formal income proof and need capital to expand their small businesses.

Currently, with 498 branches in two Telugu States, commercial vehicle loans are offered in 268 branches, while 2W, MSME, gold loans and personal loans are offered in 230 branches. The company plans to roll out loans towards CV in 170 new branches totalling 438, 2W in 80 new branches totalling 310, gold loans in 260 new branches totalling 490, MSME in 208 new branches totalling 438 and Personal loans in 60 new branches totalling 290 by Mar-23. The plan is to roll out all products in all branches by 2023-end.

Shriram Transport Finance Company, the largest financier of commercial vehicles, and Shriram City Union Finance, the largest two-wheeler financer and leader in micro, small and medium enterprise (MSME) lending, have recently been merged to form Shriram Finance. The new entity is a diversified player with a robust net worth of Rs 37,500 crore and AUM of Rs 1.71 lakh crore, the company caters to over 67 lakh customers across India (as of September 2022).

YS Chakravarti, MD & CEO, Shriram Finance commented, "Shriram Finance is the lender to the Aam Aadmi and our strategy is to focus on the self-employed and MSME segment in the 2 states. MSMEs suffer from the high cost of credit and often lack timely access to capital. There is inadequate capital infusion compounded by insufficient data on credit requirements. We specialise in understanding this segment and their credit needs."

K Srinivas, Jt MD, Shriram Finance speaking at the event said, "The two companies Shriram Transport & Shriram City have come together to form Shriram Finance and we have pooled together our strengths and will look at capitalising on each other's potential in the next one year. The states of AP & Telangana are among Shriram Finance's top five most important states and will continue to drive growth for the company. We will focus on the MSME lending segment, which has impressive potential but faces financial challenges to growth, which we intend to plug."