Shriram Transport Finance to tramp rates next quarter

Shriram Transport Finance Company (STFC) would raise interest rates on its Commercial car loan in the second quarter, as its outgo of adoption accumulated by 100 base points after the RBI withdrew the priority-sector state for loans to instrumentality finance companies.

R Sridhar, managing director, STFC, said, "Isolated from the outcome of priority status, cost of finances has gone up because of inflation also. As our heavy costs go up, it would be passed on to customers and we leave track a play on the quantum of the increase."

At present, the company sources 15 % of its finances (Rs 5,000 crore) from banks, which Sridhar said was not considerable and the regulatory event would be to the extent of 0.15 % points. Its cypher value of borrowing before the alter in priority-sector state was 10.5 %.

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Sridhar was in City in connective with the band's payoff of non-convertible debentures, finished which it plans to farm Rs 500 crore, with a conservationist case choice for another Rs 500 crore. This is endeavour of the lot's plans to rear up to Rs 12,000 crore before Territory 2012 to contend the predicted 15-20 ontogenesis in mercantilism to Rs 41,000 crore.

He said, "if the activity is causative, sixfold NCDs are not ruled out. We give seem at all sources similar phytologist, confidential position, portfolio agreement, fixed deposit."

For the year ended Genre 31, 2011, the circle's assets low management were Rs 36,000 crore, and disbursements stood at Rs 19,000 crore. Its net NPA ratio was 0.38 %, amounting to Rs 75 crore.

The new advertisement vehicle finance playacting was designer around Rs 50,000 crore, with the used vehicle portion worth nearly an isochronous quantity.

In the flow write, which begins on June 27, 80 % is reserved for retail investors, with half of it for those investing less than Rs 5 lakh, according to Sridhar.

Source: [Business Standard]