Shriram Transport Finance will raise $ 475 million through social bonds

Shriram Transport Finance will raise $ 475 million through social bonds

Asset financing organization Shriram Transport Finance Company (STFC) on Tuesday said it has raised USD 475 million (about Rs 3,500 crore) through Reg S Bond, having a tenor of 3.5 years and offering a coupon of 4.15 percent. The returns from the STFC social bond would be utilized for employment age, including through micro, small, and medium-sized enterprise (MSME) financing, the lender said in a delivery. The exchange was launched with an initial price direction of around 4.45 percent.

The bond received an overwhelming response from investors, with the final order book over-subscribed 2.5 times.

Following a strong book building, supported by high quality long only investors, the company was able to tighten pricing by 30 basis points to 4.15 per cent, the release said.

The transaction witnessed global investor participation with 66 per cent from Asia, 18 per cent from EMEA and 16 per cent from the US, with 93 per cent investment from asset managers including insurance company, 4 per cent from banks and 3 per cent from private banks and others.

The social impact is similar to the company’s priority sector with some strict exclusions and it is committed to financing towards socio economic necessities with large multiplier effects, he added.

“We are seeing rising demand from investors for impact investing and STFC is delighted to see such strong investor appetite for its social bonds from the global investor community, STFC Vice Chairman and Managing Director Umesh Revankar said in the release.

This was the seventh successful USD bond issuance by the STFC since the relaxation in the ECB guidelines, the release said.

The company has assets on the balance sheet of Rs 1.21 lakh crore (September 2021). It has a network of 1,825 branches, and employs 24,160 employees including 18,488 business teams.

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