Shriram City Union Finance Posts Record Disbursements of INR 9,069 Cr, up 28.5% YoY

Shriram City Union Finance Ltd. (Shriram City), a leading Small Enterprise Financer and among the largest two-wheeler financer (based on the number of 2W financed) announced the financial results for Q2FY23.

On a consolidated basis, the company’s disbursements rose by the highest ever to INR 9,069 Cr, up 28.5% YoY, backed by the improving economic activity and strong revival in Small Enterprise Finance, robust demand for gold loans, improving 2-wheeler demand and affordable housing.

Assets Under Management (AUM) of INR 42,663 Cr, increased by 23% YoY and Consolidated Profit After Tax rose by 27.2% to INR 383 Cr in Q2FY23.

The consolidated results include Shriram City and Shriram Housing Finance Limited. Shriram City posted strong disbursements, better yields and higher margins which enabled the company to post the highest-ever profitability metrics.

  • Assets Under Management (AUM) Rose by 23% YoY to INR 42,663 Cr
  • PAT up by 27.2% to INR 383 Cr

On a Standalone Basis: Shriram City reported its best quarterly disbursements of INR 8,020 Cr, up 24.9% YoY, while AUM rose by 18.7% YoY to INR 36,117 Cr. Net interest income rose to a record INR 1,231 Cr, up 27%.

PAT rose to a record INR 349 Cr in Q2FY23. Asset quality improved with Gross NPAs declining 18 bps QoQ to 5.93% in Q2FY23 (6.11%: Q1FY23). The company has a liquidity backup worth INR 4,559 Cr as of the end-Q2FY23.

Segment Break-up:Small business, gold, and personal loan disbursements surged at the fastest rate, as rural and semi-urban demand increased. Small Enterprise Finance accounted for 42% of total AUM, with disbursements of INR 2,129 Cr in Q2FY23.

The top Two-Wheeler (2W) financier has seen significant loan disbursements from rural India. All products in Shriram Transport Finance states have been increased, allowing the company to gain market share.

Personal Loan demand has been high for credit-tested Shriram customers.

Shriram Housing Finance Ltd, a subsidiary of Shriram City and a leading affordable home financier had a stellar Q2FY23. The company’s AUM grew by 54% YoY to INR 6,546 Cr.

The growth has been driven by the record disbursement of INR 1,049 Cr, up 66% YoY. The company has continued an aggressive growth trajectory. With AUM increasing at a 52% CAGR over the last three years, accompanied by sustained asset quality improvement.
The profit after tax for Q2FY23 was INR 34 Cr, representing an 81% increase year on year.
The company widened the distribution network to 112 branches and 211 touchpoints across the Shriram Group network so far and expects to end the financial year with ~150 branches.
Shriram Housing Finance is today the 4th largest affordable housing financer in India, with the widest distribution network in South India.

Update on the Merger:

The merger of Shriram City and Shriram Transport Finance has been approved by SEBI, BSE, NSE, shareholders, secured creditors, unsecured creditors, the Competition Commission of India, and the Insurance Regulatory and Development Authority.
We now await the National Company Law Tribunal’s ultimate approval of the amalgamation arrangement.
Shriram City has launched the business as a merged entity across 1200+ branches. And five geographical areas in readiness for operations to begin in the merged entity. This endeavour is being gradually expanded.

“Economic activity has picked up in 1HFY23, driving demand for credit from rural and semi-urban regions, and we expect this trend to sustain.” Shriram City’s good operating performance has been underpinned by substantial client addition, new loans from small businesses, all products provided in Shriram Transport offices, and assistance from the digital ecosystem. Our subsidiary, Shriram Housing Finance, has an AUM of INR 6,500 crore and is now the fourth largest affordable housing financer in India, with great growth possibilities as the amalgamated firms extend their distribution network. The merger integration is well advanced, and we are already operating as a single organisation.”

Mr. Y.S. Chakravarti, MD & CEO, Shriram City, commented on the financial performance, saying,

About Shriram City Union Finance

Shriram City Union Financing (SHRMCITY, NSE: SHRIRAMCIT), a 35-year-old company that is part of the Shriram Group, is one of India’s major non-banking finance organizations.
The Company, which focuses on the rural and semi-urban sectors, has over 4.9 million consumers. And an asset under management of around INR 426.6 billion.
The company is a top financier to SME’s, the largest two-wheeler financier, offers gold loans, and has a Housing Finance Subsidiary, Shriram Housing Finance Ltd, with an AUM of INR 65 billion.
Shriram City has 1,021 branches and an employee strength of over 30,606 across India as of 30 Sept 2022.
The company’s Long term credit rating is at AA by CRISIL, ICRA and India Ratings. Shriram City has been named one of the Best Places to Work in India in 2021 by AmbitionBox, an Info Edge subsidiary.

About Shriram Group

Shriram Group is India’s largest financial conglomerate, with prominent positions in commercial vehicle (CV) financing, retail lending, chit fund, equipment financing, home finance, life insurance, general insurance, stockbroking, financial product distribution, and wealth advisory services.
The Group’s mission is to serve the disadvantaged and is guided by its Financial Inclusion agenda, which aims to offer finance to low-income households and small companies.
Shriram Capital Limited serves as the holding company for the Shriram Group’s Financial Services (Shriram City Union Finance Limited and Shriram Transport Finance Limited) and Insurance (Shriram General Insurance Company Limited and Shriram Life Insurance Company Limited).
Shriram City Union Finance Limited’s subsidiary is Shriram Housing Finance Limited. The loan and insurance firms were established with the primary goal of improving the economy.
Shriram Group together has an overall customer base of over 22.5 Million, with around 79,100 employees across 4,000 branches. Net profit of INR 53.6 billion with Assets Under Management (AUM) of over INR 2.16 trillion (as of Mar-22).
This article was shared with Prittle Prattle News as a Press Release.
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