Non-banking financial company Shriram Transport Finance Co. Ltd, a part of the larger Shriram Group, has raised $20 million (approximately Rs 152.96 crore at current exchange rates) in debt capital from OeEB (Oesterreichische Entwicklungsbank), the development bank of Austria.
The Chennai-based company said in a statement it has raised funds from OeEB on a seven-year tenor and will use it for financing green vehicles.
The commitment from the Austrian development finance institution comes just three months after VCCircle reported that the transport-based NBFC had raised funding from Proparco SA, the private-sector arm of French development finance institution Agence Française de Développement.
New Delhi-based Perigon Consiliario LLP acted as the exclusive advisor to Shriram Transport on both transactions. The firm was set up in 2018 by Vinay Awasthy, who has worked with entities including KPMG and Citibank.
At the time of its funding, Proparco said Shriram Transport would deploy the capital received from it to fund used light commercial vehicles using compressed natural gas as fuel.
During the same period, Shriram Transport informed the stock exchanges that it had appointed several bankers including Barclays, BNP Paribas, Citigroup and Credit Suisse as joint book-runners and lead managers for a senior-secured Social Bond offering. The company said it aimed to raise as much as $3 billion via the debt issue in international markets.
Shares of the company were trading 12.19% up at Rs 669.20 apiece at the time of writing this report.
Shriram Transport’s products include commercial vehicle loans, business loans, working capital loans, life insurance and deposits. According to VCCEdge, the data research arm of Mosaic Digital, investors in the company include Singapore state investor Temasek and International Finance Corporation.
It is part of the larger Shriram Group, which has a presence in segments such as commercial vehicle financing, consumer finance, life, general insurance, stockbroking, chit funds, and financial product distribution.
Development Finance Institutions and India
The debt capital provision by OeEB to Shriram Transport is the latest move by a development finance institution in the Indian ecosystem. Entities representing both global financial institutions – such as the International Finance Corporation – and countries like the Netherlands’ FMO have made several bets on various sectors, mostly intending to focus on underserved and underrepresented segments.
Earlier this week, the Green Agrevolution Pvt. Ltd-operated agricultural-technology firm DeHaat announced that it had raised $12 million (around Rs 90.75 crore) in a Series A funding round from players including FMO.
According to a VCCircle analysis, FMO has recorded a sharp increase in its exposure to India, driven mainly by its bets on financial services companies such as Aye Finance and InCred Financial Services Ltd.
In January, microfinance firm Satin Creditcare Network Ltd raised $15 million (Rs 107.6 crore) from OeEB. The investment marked OeEB’s first bet in Indian microfinance under the latest guidelines for external commercial borrowing (ECB) funding.