A recent press report said that Shriram City Union Finance has planned to raise Rs 400 crore by way of private equity, qualified institutional placement (QIP) or the stock market with a follow-on issue.
Ms. Subhasri Sriram, Executive Director, Shriram City Union Finance, said that the company would require capital during the last quarter of the current financial year and not immediately. The company is expecting to expand its portfolio to Rs 10,000 crore in 2011-12. The company has disbursed about Rs 7,998 crore the previous year.
Ms. Subhasri said that CAR was 12 per cent, while credit rating agencies expected the company to have capital requirement of 15 per cent. She also said that with the hike in CAR, non-banking finance companies would have to increase the capital to over 15 per cent.
Reports said that the company has planned to sell loan worth Rs 1,500 crore to banks in the current financial year. Last year it has sold about Rs 1,000 crore portfolios to banks.
The NBFCs can be benefited by selling portfolios to bank at a discount as they get cash for the entire portfolio immediately. The hike in the rates has hit hard on the loan business of the banks. The home loan and their loan borrowers are hesitating to take up loans due to high interest rates.