Shriram Transport Finance appoints 8 bankers for Rs 1,500 crore rights issue

Shriram Transport Service

Commercial vehicle financier Shriram Transport Finance Co Ltd (STFC), the flagship entity of Chennai-headquartered Shriram Group, has paired up with eight merchant bankers to launch a Rs 1,500 crore rights issue and gear up for any coronavirus related uncertainties, according to the sources.

This is by far the firm’s first step in a decade to raise funds via equity markets. Ajay Piramal-led Piramal Group owns 20 percent stake in Shriram Capital, which in turn holds around 26 percent in STFC.

“The kick-off for the proposed rights issue took place on June 22 and the firm has finalised JP Morgan, ICICI Securities, HSBC, BNP Paribas, Citi, Credit Suisse, SBI Capital and Axis Capital as merchant bankers,” the sources added.

Few of the people who are closely connected to the news says, the plan is to launch the rights issue in the coming few weeks and close the deal before the end of July. Also, the names are finalised of the shortlisted merchant bankers and the launch timeline.
However, the few of brokerages believe many non-banks will seek fresh equity capital to pre-empt any worsening due to COVID-19. They forecast around $3.5bn-4.5bn of equity raising from this proportion. The reasons include risk mitigation, cash conservation, confidence or growth capital and opportunity capital.

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