Shriram City Union Finance Ltd (SCUF) and Shriram Capital Ltd (SCL) on Monday announced their merger with group firm Shriram Transport Finance Co (STFC). The merged entity will be named Shriram Finance Ltd.
Before merging with Shriram Transport Finance, SCL will demerge all other businesses of the group — namely, life insurance, general insurance and all non-lending and non-insurance activities and these will be held outside the listed firm. The boards of directors of STFC, SCUF and SCL have approved the merger plan.
Pursuant to the merger, Shriram Transport will issue 1.55 shares for every 1 share of SCUF and 0.09783305 share for every 1 share of SCL. This translates into SCL shareholders getting 1 share of STFC for every 1 share held by SCL in STFC and SCL shareholders will get 1.55 STFC shares for every 1 share of SCUF held by SCL
“The merger would help the group bring together all its lending products — commercial vehicles, two-wheeler loans, gold loan, personal loan, auto loan and small enterprise finance —under a single roof, thereby creating a financial powerhouse which would end up being a market leader in all the product and consumer segments that it operates in,” Shriram group said in a statement.
“SCUF brings with it an enviable granular product suite with an AUM of Rs 35,000 crore and a distribution network of over 950 branches. Post-merger with STFC, the merged entity would have a combined AUM of over Rs 1,50,000 crore, over 2 crore customers served till date and a distribution network of over 3500,” it said. DV Ravi, MD Shriram Capital said, “the merger will enhance our distribution footprint across all business lines without incurring any incremental capex …”
Ajay Piramal, chairman, PEL, said, “I am pleased to see the coming together of both lending businesses of Shriram. While they emerge as the largest retail finance NBFC, it also opens up immense opportunities for them with the synergies that transpire…”