As Shriram Finance Ltd charts a course towards financial expansion, raising speculation in the market, investors are intrigued. The company’s recent announcement of plans to raise funds through U.S. dollar-denominated bonds, coupled with a consistent rise in net profits, begs the question: Is it the right time to invest?
Daily Chart Analysis
Since June 2023, Shriram Finance Ltd’s stock has been on a robust uptrend, breaking resistance points and consistently achieving higher highs and higher lows.
Currently trading at ₹2309.35, a stone’s throw away from its all-time high of ₹2335, the stock has delivered over 75% returns in less than a year. With a substantial FII holding of 54.67% as of September 2023, the stock seems to have caught the attention of institutional investors.
Utilization of Funds
The company’s decision to raise funds aligns with its commitment to social projects and activities permitted under the Reserve Bank of India’s external commercial borrowing guidelines. Although the exact amount remains undisclosed, industry experts hint at a potential fundraising between $500 million to $1 billion through the issuance of U.S. dollar-denominated bonds.
Q2 FY2023-24 Results
Shriram Finance Ltd’s financial health is exemplified by its Q2 FY2023-24 results, showcasing a 12.59% YoY rise in net profit to ₹1,751.44 crore. Total income surged by 15.44% to reach ₹8,564.45 crore for the quarter. Net Interest Income (NII) witnessed an impressive 18% growth, standing at ₹4,934 crore. The gross NPA ratio decreased to 5.79%, emphasizing the company’s efficient asset management.
About the Company
Shriram Transport Finance Company Ltd, a key player in the SHRIRAM Group conglomerate, has a strong foothold in the financing business. With a focus on commercial vehicle financing, particularly trucks, Shriram Finance operates as a Deposit-taking NBFC, boasting a wide network of branches and strategic partnerships.
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