Shriram Transport Finance raises $250 million in long-term funding from DFC

Commercial vehicle financiers, Shriram Transport Finance Company Limited (STFC), which is a part of the Shriram Group, on Thursday said that it has raised long-term funding of $250 million from the US-based International Development Finance Corporation (DFC).

The funds raised will enable STFC to provide credit for the purchase of new and used vehicles throughout India, the company said in a statement.

Proceeds from DFC will be used in vehicle finance for commercial purposes, alternate fuel financing namely through, CNG, LPG and electric vehicles, employment generation through MSME loans, specifically, finance women entrepreneurs, cater to laggard states of the country and empower and promote the social and economic status of the underserved communities in India, STFC added.

Besides the DFC loan, STFC also raised $475 million through a 144A Bond from the international market during the start of 2022.

Commenting on the fundraise, Umesh Revankar, VC & MD of STFC, said, “...We will help fund more individual operators to buy vehicles into new markets, provide funding towards employment generation in rural areas, and empower more communities to optimise their income and have a better quality of life.”

Further, the Chief Development Officer ( CDO) of DFC, added, “DFC’s investment in Shriram Transport Finance Company is helping boost economic growth, development, and financial inclusion across India...With DFC’s loan, STFC will also help to green India’s commercial transport sector, a notoriously difficult sector to de-carbonize, by financing alternative fuel and lower-emissions vehicles."

Shriram Transport Finance Company is a 42-year-old company and part of the Shriram Group and is one of the largest asset financing NBFCs in India. The company is a leader in the organised financing of pre-owned trucks with a strategic presence in 5-10-year-old truck lending.