By March, the company hopes to have crossed the Rs 5,600 crore mark in assets under management (AUM).
Shriram Housing Finance, which focuses on the affordable segment, has received an additional Rs 300 crore in equity capital from its parent company, Shriram City Union Finance, bringing its total equity capital to over Rs 1,100 crore.
The company has set a target of crossing Rs 5,600 crore in assets under management (AUM) by March, having already surpassed the Rs 4,000-crore mark in July and with the new growth capital, it would be able to develop its balance sheet more quickly.
This is the second round of equity capital infusion for the Shriram Group’s housing finance company, bringing the total equity infusion in FY22 to Rs 500 crore and Rs 1,088 crore since its establishment. The capital injection will allow the mortgage lender to build its loan book and extend its balance sheet more quickly.
According to Ravi Subramanian, managing director and chief executive of Shriram Housing Finance, “this capital infusion will enhance Shriram City Union’s holding in the company to 85.02 percent.” Small towns are seeing significant demand for cheap housing and mid-market segments, he said, and the financial infusion would be used to cover the increased demand for house loans.
The company has ambitious aspirations to extend its distribution network, with a particular focus on cross-selling to Shriram consumers in Andhra Pradesh and Telangana via the Shriram Group network. The funds will also be used to help support expansion plans in the targeted areas.
According to him, the company’s net worth has climbed to Rs 1,088 crore as a result of this investment, up from Rs 788 crore in June 2021. This cash infusion, according to Subramanian, will assist the company extend its footprint and increase its development potential, as well as reaffirm the group’s conviction in the company’s altered business model.
“We’d keep building on our key competencies and maintaining our upward trajectory. This would also allow us to exceed the competitors in terms of both volume of business and collection efficiency “Added he.
He said loan sales had been strong this fiscal year, with an annualised growth of 60%, driven by rising demand for affordable housing loans. “Our expansion plans in Andhra Pradesh and Telangana are on track, and this will help us fulfil our full-year AUM target of Rs 5,600 crore in the fiscals.”
Subramanian had previously told PTI that the city-based affordable housing focused lender, which is one of the three credit business verticals of the Chennai-based Shriram Group, closed FY21 with a loan book of Rs 3,923 crore, which had crossed Rs 4,000 crore in end-June despite the pandemic washout.
This means that over the following 30 months, the corporation aims to add more than 1.5 times its current book, he added. According to the plan, the loan book, which had already surpassed Rs 4,000 crore in the June quarter, should reach Rs 5,000 crore by December and conclude the year at roughly Rs 5,600 crore, before increasing to Rs 8,000 crore in FY23 and topping Rs 10,000 crore in FY24, he had said.