Shriram City Union Finance to raise Rs 325 cr via QIP/IP

MUMBAI: Shriram City Union Finance (SCUF) may raise around Rs 325 crore capital through either an institutional placement of shares or from private equity investors this fiscal, a top official has said.

"It depends on how much the market can bear. Rs 750 crore is what we need. I am sure we will do more than half of that this year," managing director GS Sundararajan told reporters.

The Chennai-based company will opt either for a qualified institutional placement (QIP) or a stake sale to a private equity player for raising the capital, he added.

The company already has a shareholder approval to raise Rs 1,000 crore through various routes.

Sundararajan said the company does not have an immediate need for capital and it will need Rs 750 crore in the second half of the next fiscal.

However, depending on the market conditions, it will take a call on raising the capital, he said. "Over the next 6-9 months, we will know how much of market interest is there. At that time, we will decide whether it is a QIP, it is a private equity or a combination of both."

The company, from the Shriram Capital Group, has interests in lending to micro and small businesses, two wheelers and loans against gold.

Sundararajan said it will increase the share of enterprise loans to the micro and small businesses to up to 50 per cent of the book from the current 42 per cent.

He said the group, which has its genesis in the chit funds business, wants to gradually grow this share to 65 per cent in the next three-four years and would like to touch the 50 per cent mark by the end of the fiscal.