The Shriram Group has secured RBI approval for the merger of Shriram City Union Finance and Shriram Capital Ltd with Shriram Transport Finance Company in a consolidation set to create the largest retail finance NBFC in the country.
In a note to the exchanges late on Wednesday, Shriram said RBI issued its No Objection to the scheme of amalgamation through a letter dated June 15. In December last year, the boards of various group companies met to approve the merger of SCL and SCUF with STFC.
The RBI green signal counts among a raft of necessary approvals — the scheme has to secure nods from the IRDA and other regulators to sail through. The combined financial service entity, Shriram Finance Ltd, would benefit from the multiplier effect of the unification of numerous market channels, and leverage data analytics to serve customers – counting over 2 crore by end-December 2021 – better. “The merger would help the group bring together all its lending products – Commercial vehicles, Two-Wheeler Loans, Gold Loan, Personal Loan, Auto Loan & 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,” the company had said in a statement last year.
Already, Shriram group manages assets worth over Rs 1.8 lakh crore. For the combined entity, STFC’s Executive Vice President and CEO Umesh Revankar would be the Vice-Chairman while Shriram City’s MD-CEO YS Chakravarti would be the MD & CEO, said the statement.
The Group had also said it would sharpen focus on digital lending, with existing and new financial products finding distribution on a newly built super app. Recently, top executives said the super app would be unveiled by Q1 of next fiscal.
