DSP Merrill Lynch Capital Ltd, the non-banking finance arm of Merrill Lynch, has offered to buy truck portfolio amounting to $200 million from Shriram Transport Finance Company Ltd (STFCL) during the current fiscal. Of this, the first tranche of truck portfolio amounting to $100 million has already been completed and the second tranche would be done by the end of the current fiscal.
Addressing a press conference here on Monday, R Sridhar, managing director, STFCL, said, the company has Rs 7,500 crore of funds under management. “We are looking to grow in the next four years to Rs 15,000 crore of assets under management. We need capital to grow. The company increased its capital by $100 million through Newbridge Capital in February 2006.
“Many manufacturers are coming into the market and there is a huge demand for trucks in the country. We are looking at playing a vital role in the road transport industry. Now we have good access to international debt through portfolio buyout. The first tranche of the deal with DSP Merrill Lynch has been executed and the next tranche will be done before March 2007. The portfolio will be off our books but we will be managing the credit on behalf of DSP Merrill Lynch,” he said.
Rajiv Garg, head-global asset based finance, securitisation and principal investments, DSP Merrill Lynch said, “India is a big strategic economy. We want to create our own financing platform in India. The company wants to grow its balance sheet in the country. The deal with Shriram is a true sale transaction and was done at par. The portfolio bought from Shriram is a standard pool of receivables with different tenure. DSP Merrill Lynch is exploring all avenues of financing in India.”
Speaking on the occasion, R Thyagarajan, chairman, Shriram Group, said, “The funds channelised through Merrill Lynch will help the small truck owners to get easier access to funds, thereby helping the modernisation of the trucking fleet of the country.” In India, the truck operators need finance to the tune of about Rs 70,000-80,000 crore.
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