Shriram Transport Finance to raise Rs 750 crore via NCDs

MUMBAI: Shriram Transport Finance Corp is coming with the first public sale of bonds this quarter as hopes of lower interest rates fade amid talk of the Reserve Bank of India reversing the interest rate cycle to prevent a currency slide. The country's largest truck financier is planning to raise Rs 750 crore by issuing non-convertible debentures to retail and institutional investors.

"We do not expect RBI to cut rate in its July policy," said Umesh Revankar, managing director, Shriram Transport Finance. "We have not seen transmission of rate cut so far. Only when there is a CRR cut can we expect banks to lower base rate."

The issue opens on July 16 and closes on July 26. The issue base is around 375 crore, with option to retain an oversubscription of up to Rs 750 crore. The company is focusing mainly on retail to mop up the funds - the share of retail is capped at 50%, HNI is at 30%, with 10% each reserved for institutions and non-institutions.

The interest rate for retail investors is 10.9 % for three years and 11.15% for five years per annum. It is lower from the interest offered last year of 11.15% to 11.40%.