**Shriram Finance** Sets Ambitious Goal for International Funds

Exciting news from **Shriram Finance**, one of India’s premier non-banking financial companies (NBFCs). The company is gearing up to raise a whopping $1.5 billion from foreign investors in the financial year 2024-25! This bold move is aimed at diversifying its funding sources, as shared by CEO and Managing Director **YS Chakravarti** in a recent report by **Reuters**.

A Targeted Strategy

Chakravarti outlined the company’s funding objectives, stating, “We are targeting to raise anywhere between $1.25 billion to $1.5 billion (in fiscal year 2024-25),” with plans to tap into a mix of loans and bonds. This statement was made during a conversation on Tuesday, August 27.

Market Performance

The market reacted positively to the news, with shares of **Shriram Finance** surging by 2.35%, closing at ₹3,234.85, a significant jump from ₹3,160.55 the previous day. This uptick was reported following the trading hours on Tuesday.

Current Fundraising Status

As of now, **Shriram Finance** has successfully raised $300 million of its $1.5 billion target for this financial year. The company is also eyeing an additional $300 million to $350 million in the upcoming months, according to the report.

RBI’s Impact on Funding

In a move noted last November, the **Reserve Bank of India (RBI)** mandated all lending entities to set aside more capital for loans granted to NBFCs like **Shriram Finance**. This regulatory change has raised the cost of funding from local banks.

Market Insights

Analysts have pointed out that non-banking lenders with a high dependence on domestic banks are now facing funding challenges due to this RBI directive. However, **Chakravarti** reassured stakeholders that **Shriram Finance** has not encountered significant funding pressures. He attributed this stability to the firm’s robust credit rating and diverse borrowing options.

Resilience Amid Challenges

“It’s the smaller players and the companies that are rated below AA who are getting squeezed. For us, it’s not too much of a concern because our bank borrowing constitutes only about 24%-25% of our total liability portfolio,” Chakravarti remarked.

Borrowing Breakdown

Delving into the specifics, **Shriram Finance**’s loans from banks accounted for 24.8% of its total borrowings. Meanwhile, borrowings through foreign currency loans and bonds made up 8.3% and 5.8%, respectively.

Looking Ahead

Looking forward, the non-banking lender anticipates a 15% to 16% increase in its assets under management for the July to September quarter. However, this projection represents a slower growth rate—approximately 21% lower compared to the previous quarter, driven primarily by heightened activity in the large ticket vehicle segment.