Shriram manages Rs 30K Cr ($ 6.5 BN) 

September 24, 2010  |  ET  Bureau

Started in 1979, Shriram Transport Finance took two decades to build because it was adamant about funding small-time buyers of used trucks, a segment shunned by other financiers. But from 1999 onwards, its business witnessed dramatic growth. Its market capitalisation (m-cap) of Rs 500 crore ( $ 108 M)  in 1999 has moved  up to Rs.16,079 ($3.5 BN) crore.

In 2006, Shriram had an m-cap of Rs 1,966 crore ($ 423 M). Rival Mahindra and Mahindra Financial Services had Rs 2,003 crore  ($ 431 MM). But now Shriram is way ahead of Mahindra and Mahindra Financial (Rs 5,782 crore). From managing assets worth Rs 2,500 crore ($ 538 M), 11 years ago, Shriram today manages Rs 30,240 crore ($ 6.5 BN) of assets. Mahindra and Mahindra Financial manages Rs 10,400 crore  ($ 2.3 BN)  while Sudaram Finance manages Rs 16,053 crore ($3.5BN).

Risk-free funding 

When it started out, Shriram had the customers to lend to, but not the money. For other traditional lenders, it was the opposite. Besides, Shriram was dealing in used trucks and with smaller operators, its peers were funding medium and large truck owners with only new vehicles. Shriram was perceived as a company that dealt with risky assets, and rating and funding agencies kept safe distance, says Sridhar. In 1999, when large multinational companies entered India, Shriram approached lenders like Citibank, GE and ICICI Bank. Most MNCs were looking to grow their retail portfolio in India and Shriram, with its vast network of truckers, presented an opportunity. Citibank’s subsidiary, Citicorp Finance, agreed to partner with them. 

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