One of the large-cap NBFC stocks engaged in the business of commercial vehicle financing, mainly focusing on trucks from older models to new ones. The stock has plunged by 0.23 percent after selling an 84.44 percent stake in SHFL to Warburg Pincus for Rs. 3,929 crore.
Stock Price Movement:
In Thursday’s trading session, Shriram Finance Limited’s share plunged by 0.23 percent from the previous close of Rs. 3,247.45. The stock opened at Rs. 3,248.60 and is currently trading at Rs. 3,239.90, with a high of Rs. 3,263.25 and a low of Rs. 3,222.10. The market capitalization now stands at approximately Rs. 11,174.75 crore.
What Happened:
Shriram Finance Limited has successfully completed the sale of its 84.44 percent stake in Shriram Housing Finance Limited (SHFL) to Warburg Pincus affiliate, Mango Crest Investment Ltd, for Rs. 3,929 crores.
The transaction, which received all necessary regulatory approvals, marks the end of SHFL’s status as a subsidiary of Shriram Finance, positioning the company for accelerated growth and expansion under new ownership.
Future Outlook
The company expects 17 to 18 percent growth in its commercial vehicle portfolio over the next two quarters. It will continue focusing on its existing customer base, with 97 to 98 percent of loan disbursements directed to current customers.
Products and Services
Shriram Finance provides a wide range of financial products, including commercial and passenger vehicle finance, two-wheeler loans, gold loans, personal loans, SME finance, and home loans through its subsidiary, Shriram Housing Finance, catering to various individual and business needs.
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Recent quarter results and ratios:
Shriram Finance Limited’s net interest income has increased from Rs. 3,622 crore in Q2 FY24 to Rs. 4,350 crore in Q2 FY25, which has grown by 20.1 percent. The net profit of Shriram Finance Limited has also grown by 20.15 percent from Rs. 1792 crore in Q2 FY24 to Rs. 2153 crore in Q2 FY25.
Shriram Finance Limited’s net interest income and net profit have grown at a CAGR of 15.56 percent and 23.49 percent, respectively, over the last five years.
In terms of return ratios, the company’s ROCE and ROE should be 11.3 percent and 15.9 percent, respectively. The debt-to-equity ratio of the company is to be 3.97x. Shriram Finance Limited’s EPS is to be Rs. 214.
Shareholding pattern
In September 2024, Shriram Finance Limited had a majority stake held by the promoters at 25.40 percent, foreign institutional investors at 53.29 percent, domestic institutional investors at 16.21 percent, and the public at 5.07 percent.
Company Overview:
Shriram Finance Limited, part of the Shriram Group, is a prominent non-banking financial company (NBFC) in India. The company was established through a merger in November 2022 and combines the strengths of Shriram Transport Finance, Shriram City Union Finance, and Shriram Capital. The company focuses on providing a wide array of financial services tailored to meet the needs of various customer segments.
Written By – Nikhil Naik
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