FY22, Shriram City Union Finance plans to spend up to Rs 23,000 crore

Shriram City Union Finance NSE -1.25 percent (Shriram City), a Chennai-based non-banking finance firm, expects total disbursements of Rs 22,000-23,000 crore this fiscal year, according to a top company executive. It disbursed Rs 4,560 crore in the first quarter of 2021-22, down from Rs 6,570 crore in the March quarter of 2021.

Y S Chakravarti, managing director and CEO of the lender, stated that July 2021 was a better month than June, with payments exceeding Rs 3,000 crore. In July, collection efficiency was nearly 100%, up from 93% in June. “On an average it (disbursements) is around Rs 6,200-6,300 crore per quarter. In the remaining three quarters, we expect to touch about Rs 18,000-19,000 crore. For the financial year, we should end up with Rs 22,000-23,000 crore (of disbursements),” Chakravarti said.

Small and medium enterprises (SMEs), two-wheelers, personal loans, gold loans, and loan against property are among the segments that the lender finances. ME and gold loan categories are witnessing strong demand, according to Chakravarti, and the company will continue to focus on building the book in those areas. “We went slow on SME (financing) for the last one-and-a-half years. It has come down from 55 percent to close to 49 per cent right now. The idea is to take it back to 55 per cent,” Chakravarti said.

Two-wheeler finance, which accounts for about 26-27 percent of the lender’s entire loan portfolio, is another important segment for the company. In the current fiscal year’s second quarter, he plans to spend roughly Rs 1,500-1,600 crore on two-wheelers.

The lender made a profit after tax of Rs 208 crore in the quarter ended June 2021, compared to Rs 192 crore the previous quarter. The company’s asset quality improved year over year, with gross stage 3 levels of 6.91 percent in Q1 FY22 compared to 7.28 percent the prior fiscal quarter.