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90% Buy 👍 Sector logoNBFC
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Shareholding Info
  • Promoters
    25.45 %
  • Foreign institutions-FII
    54.67 %
  • Other domestic institutions
    5.6 %
  • Retail and other
    4.71 %
  • Mutual Funds
    9.57 %

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Key Indices in NSE

Key Indices in BSE

STFC overview


Shriram Transport Finance Company Limited, is a part of the financial conglomerate Shriram Group. It was established in 1979. It finances commercial vehicles. Shriram City Union Finance Limited finances two-wheelers. In November 2022, these two entities were merged to form Shriram Finance Limited. The company is a retail Non-Banking Financial Company.

Shriram Transport Finance Company Limited offers a wide range of credit solutions. These include commercial vehicles, two-wheeler loans, car loans, home loans, gold loans, personal loans and small business loans.

The company has 25,456 employees, a pan-India network of 1,854 branches, 775 rural centers and partnerships with 500 private financiers. As of 31st March 2022, the company's market capitalisation stood at ₹30,677 crore.

As of 14th December 2022, the Shriram Transport Finance Company share price was ₹1378.25 on the Bombay Stock Exchange (BSE) and ₹1378.55 on the National Stock Exchange (NSE).

STFC journey


Key milestones since inception are -

  • 1974: STFC is established.
  • 1984: Initial public offer is released.
  • 1990: Telco and Ashok Leyland invest in the business.
  • 1995: STFC ties up with Citicorp for commercial vehicle financing under portfolio management services. The first securitisation transaction goes through.
  • 2002 - 2004: Preferential allotment to Citicorp (India) Finance, Axis Bank and Reliance Capital.
  • 2005 - 2006: SIL and SOFL merge with STFC. Profit After Tax (PAT) crossed ₹100 crore in 2006. STFC receives investments from ChrysCapital and TPG.
  • 2009: The company successfully places ₹1,000 crore in debentures with domestic investors. It purchases hypothecation loans and construction equipment from GE Capital Services India and GE Capital financial services.
  • 2011: STFC launches SAMIL, a platform for trading pre-owned trucks at a fair price.
  • 2013: Assets under Management (AUM) crosses ₹50,000 crore.
  • 2017 - 2018: STFC sells a controlling stake of 55.44% in its wholly owned subsidiaries SAMIL to MXC Solutions India Private Limited.
  • 2022: Shriram City Union Finance (SCUF) and Shriram Capital Limited (SCL) merge with STFC in November 2022. STFC is now renamed to Shriram Finance Limited.

STFC - Initial Public Offer (IPO)


STFC launched its IPO in 1984. 50,000 shares were subscribed for by signatories to the Memorandum of Association. 2,50,000 shares were issued at par, of which 70,000 shares were reserved and allotted to promoters, directors etc.

STFC products


STFC began its journey by offering affordable finance to first-time buyers (FTBs) and driver-turned-owners of pre-owned commercial vehicles. It has institutionalised loan origination, valuation and collection. Over the years, STFC has expanded its products and services to encompass:
  • Personal loans: Two-wheeler and gold loans
  • Commercial vehicle loans: Commercial goods vehicle finance, passenger commercial vehicle finance, tractor and farm equipment finance, construction equipment finance
  • Working capital loans: Vehicle insurance finance, tire finance, tax finance, toll finance, repair or top-up finance, fuel finance, challan discounting
  • Business loans and emergency credit line guarantee scheme
  • Deposits: Fixed deposits and recurring deposits
STFC stock price return in 5 years – 0.92%.

STFC business highlights (FY2021-22)


Assets under management

₹1,27,041 crore

Total income for the year 

                    ₹19,274 crore

Profit after tax

                      ₹2,787 crore

Net interest income

₹9,316 crore

Earnings per share 

₹102


STFC performance highlights


3-year CAGR (revenue)

7.33%

EBITDA (FY2021-22)

₹13,418 crore

Profit (FY2021-22)

₹2,787 crore

Share price return in last 3 years

24.73%

ROCE (FY2021-22)

9.90%

ROE (FY2021-22)

11.4%


STFC management

  • Chairman and Independent Director: Jugal Kishore Mohapatra
  • Executive Vice Chairman: Umesh Govind Revankar
  • Managing Director and CEO: Y S Chakravarti
  • Joint Managing Director and Chief Financial Officer: Parag Sharma

Indian finance industry overview


The following are the key players in the finance industry -

Key Players

Market capitalisation (December 2022) (in crore) 

STFC

₹37,306

Bajaj Finance 

₹4,02,937

Bajaj Finserve 

₹2,58,562

SBI Cards 

₹75,583

Bajaj Holdings 

₹69,837


Size of the Indian financial services industry


The market size of the financial services industry in India is projected to be ₹44 crore. The industry spans lending, insurance, wealth management and banking services.

Finance industry growth prospects


The total revenue of the financial services industry in India is expected to grow at a compound annual growth rate of 7.36% from 2022 to 2026. The market size is expected to grow to ₹58 crore by 2026. Digital transformation and access to financial services among underserved segments will be key drivers of this growth.

STFC growth prospects


After the merger of STFC with Shriram City Union Finance in November 2022 to form Shriram Finance, the company's net worth is pegged at ₹40,900 crore. The total assets under management amount to ₹1,71,000 crore. The company aims to go bullish on the micro, small and medium-sized enterprise credit market, with growth projections in business segments such as financing commercial vehicles, MSMEs, personal loans, gold loans and vehicle loans.

Risks and concerns

  • Shriram Transport Finance Company's stock price may be affected by the rise in inflation and impact the growth rate of both consumer and business segments.
  • Geopolitical conflicts can affect the supply chain for various products and services.
  • The company also faces competition from captive finance companies and small banks, which are digitising their services.
  • There's a potential for an increase in finance costs due to the maintenance of a larger liquidity buffer against crises such as the pandemic.
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