Shriram City Union Finance’ Consolidated Disbursements at Record High of INR 8,398 Cr, Standalone PAT Highest in 2 years at INR 293 Cr in Q3FY22

by Suman Gupta

Chennai, January, 2021: Shriram City Union Finance Ltd. (Shriram City), India’s largest two-wheeler financer (number of 2W financed) and part of the Shriram Group announced the financial results for Q3FY22 today. On a Consolidated basis, company reached the highest disbursements mark at INR 8,398 Cr, up 24% YoY backed by strong demand for 2-wheeler and Micro, Small and Medium Enterprises (MSME) loans. Assets Under Management (AUM) of INR 36,853 Cr, increased by 16.3% YoY. Posted consolidated Net Profit of INR 322 Cr, increased by 5.9% YoY. The consolidated results include Shriram City and Shriram Housing Finance Limited. Shriram City Standalone Profit After Tax (PAT) at INR 293 Cr, was the highest in 2 years.

On a standalone basis, Shriram City has reporter best ever disbursements at INR 7,630 Cr, up 23% YoY, up 19% sequentially while AUM rose by 13% YoY to INR 32,247 Cr. PAT rose to its highest in 2 years to INR 293 Cr in Q3FY22 compared to INR 280 Cr last year. In line with the RBI circular (RBI/2021-22/125 DOR/STR/REC.68/21.04.048/2021-22 dated November 12, 2021) on Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances – Clarifications, the Company has revised its process of NPA classification. As a consequence, this shaved off INR 97.6 Cr from the companies PAT. Collection Efficiency stood at 103% in the quarter. Asset quality continued to show improvement sequentially, with Gross Stage 3 levels at 6.61% (6.86%: Q2FY22), reported GNPA as per RBI circular (Nov-21) however rose to 7.30%. Restructured book stood at INR 315 Cr, representing less than 1% of AUM. The company has liquidity back up of INR 5,027 Cr as of end Q3FY22.

Segment Break-up: SME loans, contributed 45% of the total AUM and contributed to 26% of disbursement at Shriram City in Q3FY22. The company, the largest Two-Wheeler (2W) financer has witnessed strong loan disbursements sequentially in 2-wheeler loans, their disbursements contributed 29% of total disbursals. The Company has expanded its Gold loans business in north India and will focus on replicating the successful gold loan franchise of the south now in the north. Gold disbursals contributed 22%. Personal Loans too showed a strong rise year-on-year, with PL contribution to disbursement at 15%.

Shriram Housing Finance Ltd, a Subsidiary of Shriram City a leading affordable home financer had a strong Q3FY22, with AUM growth of 47% YoY to INR 4,606 Cr. The AUM growth is driven by robust disbursement growth rate of 29% YoY to INR 768 Cr, backed by investments made in widening the distribution network. Within the affordable housing finance landscape, Shriram Housing Finance now has the widest distribution network in South India.

Commenting on the performance Mr. Y.S. Chakravarti, MD & CEO, Shriram City said: “The last 2 quarters we have witnessed a strong revival in pent up demand from the ‘Aam Aadmi’, who has been the hardest hit by the pandemic. MSMEs had faced stress in the last 2 years, but things are slowly turning around and businesses is on the road to recovery. The Union Budget 2022 is also likely to lay emphasis on rural and MSMEs schemes along with environmental friendly policies and that benefit will trickle-in in FY23. On the digital side, we launched Express 2Wheeler loans, Contactless Personal Loans, contactless credit appraisal and our online fixed Deposit program which will be a key driver for growth going ahead. We have partnered with EV manufacturers and have a focused strategy to grow that segment of the business as more EVs come into market. Our subsidiary, Shriram Housing Finance had a stellar quarter, with AUM growing 47% in Q3FY22, driven by the widening distribution network in south India and affordable housing taking center stage among the housing finance landscape.  Shriram Housing Finance is well placed to capture the high growth and underpenetrated small ticket housing loan segment to grow its AUM to INR 10,000 Cr by FY24. The merger with Shriram Transport Finance Company is expected to be completed in 2022, which will further accelerate growth for Shriram City”

About Shriram City Union Finance: Shriram City Union Finance (Shriram City; BSE: SHRMCITY, NSE: SHRIRAMCIT), a 35-year-old company and part of the Shriram Group, is one of India’s leading non-banking finance companies. Focused on the rural and semi-urban sector, the Company has over 4.4 Million customers and has an Asset Under Management of around INR 368.5 Billion. The Company is a leading Two-wheeler financier, provides loans to SMEs, Gold loans and also has a Housing Finance Subsidiary, Shriram Housing Finance Ltd with an AUM of INR 42.5 Billion. Shriram City has 986 branches and employee strength of 27,000 across India as of 31 Dec 2021. The companies Long term credit rating is at AA with Positive Outlook by India Ratings, and AA on Rating Watch with positive implication by CRISIL, ICRA and CARE. Shriram City has been named one of the Best Place to Work in India in 2021 by AmbitionBox, an Info Edge subsidiary.

About Shriram Group: Shriram Group is India’s leading financial conglomerate with a dominant presence in commercial vehicle (CV) financing, retail financing, chit fund, equipment financing, housing finance, life insurance, general insurance, stockbroking, distribution of financial products, and wealth advisory services. The Group focuses on serving the underserved and is driven by its Financial Inclusion agenda of bringing finance to low-income families and small businesses. Shriram Capital Limited is the holding company for the Financial Services (Shriram City Union Finance Limited & Shriram Transport Finance Limited) and Insurance entities (Shriram General Insurance Company Limited & Shriram Life Insurance Company Limited) of the Shriram Group. Shriram Housing Finance Limited is a subsidiary of Shriram City Union Finance Limited. The lending and insurance companies were created with the primary objective of optimizing the synergies across the Group entities.

Shriram Group together has an overall customer base in excess of 21.65 Million, around 67,000 employees across 4,000 branches. Net profit of INR 49 billion (FY21) with Assets Under Management (AUM) of over INR 2 trillion (Sep-21).