Shriram Transport Finance Company (STFC), a Chennai-based commercial vehicle financier, has announced the completion of its qualified institutional placement (QIP) raising Rs 583 crore ($125 million).
STFC will allott 116.58 lakh shares, amounting to a dilution of around 5.2% stake, said the company in a filing to BSE.
The QIP has been made at a price of Rs 500.8 per share. The scrip of STFC was trading at Rs 492 on Friday morning, at a 1.6% discount to the issue price. The shares have been allotted to 45 global as well as domestic funds and insurers which included 22 existing investors. STFC added in its statement that the placement was successfully executed with strong interest among domestic as well as international investors, against the backdrop of volatile equity market conditions.
STFC has also been able to good give good returns to its private equity investors. In late 2009, PE firm ChrysCapital exited its five-year-old investment in STFC with around a 12-times return. For first three quarters of FY10, STFC has reported an income of Rs 3,236 crore with a profit after tax (PAT) of Rs 608 crore. This is as compared to revenues of Rs 2,714 crore and a PAT of Rs 458 crore during the same period in FY09.
Citigroup Global Markets, DSP Merrill Lynch and IDFC-SSKI were the joint global co-ordinators and book running lead managers to the issue.
“The net proceeds from the offering will be primarily utilised for accelerating the expansion of our core commercial vehicle financing business as also fresh investments in our proposed equipment financing and vehicle trading ventures,” said STFC’s managing director R Sridhar.