Shriram Group board gives go-ahead to merger of lending subsidiaries

The board of directors of Shriram Group on December 13 approved the long-awaited merger of its lending subsidiaries Shriram Capital (SCL) and Shriram City Union Finance (SCUF) with Shriram Transport Finance (STFC). The merged entity would be known as Shriram Finance.

“The merger is subject to the approval of shareholders of SCL, SCUF and STFC. Approvals from the RBI, CCI, IRDA, NHB, NCLT and other such other regulators may be required,” according to regulatory filing by the company.

Shriram Transport will issue 1.55 shares for every share of SCUF and 0.09783305 share for every share of SCL. This translates into SCL shareholders getting one share of STFC for every share held by SCL in STFC and, while SCL shareholders will get 1.55 STFC shares for every share of SCUF held by SCL, the statement said.

The company believes that the merger would help it bring together all its lending products – commercial vehicles, two-wheeler loans, gold loan, personal loan, auto loan and small enterprise finance – under a single roof, creating a financial powerhouse with the potential to be a market leader in all the products and consumer segments that it operates in.