Shriram Finance raises USD 750mn through Social Bond from International Bond Markets

Chennai, January 17, 2024:

Shriram Finance Limited (“SFL” or “Company”) One of India’s largest retail financing Non-Banking Finance company has successfully priced a USD 750 million Fixed Rate Senior Secured 144A / Reg S Bond for a 3.25year tenor. This deal marks the largest deal size by the company. This is the Company’s 8th successful USD public bond issuance since the relaxation in the ECB guidelines.

Following a strong book build supported by high quality long only marquee investors, the Company was able to achieve highest tightening in the pricing by 37.5 bps. This also marks the tightest credit spreads over 3 year US Treasuries in our USD bonds.

The bond got an overwhelming response from over 200 investors with the order book in the range of 4x of the issue size.

The transaction witnessed 32% participation from APAC, 32% from EMEA and 36% from US with 81% investment from asset managers/fund managers, 10% from Sovereign Supranational and Agency / Insurance and 3% from private banks and others.

SFL’s Social Bond issuance is guided by SFL’s Social Finance Framework which is aligned to the ICMA Social Bond Principles. The proceeds from the bond would be used for employment generation especially through MSME financing. SFL has obtained a second party opinion from S&P on our Social Finance Framework mapping to UNs Sustainable Development Goals –

1. No poverty, 8. Decent work and economic growth, 9. Industry, innovation and infrastructure,

10. Reduced inequalities.

SFL’s financial instruments and services provided are:

Financing to small road transport operators (SRTOs) and first-time borrowers (FTBs) at favorable interest rates, where SRTOs and FTBs are from underserved communities across India;
Suitable financial instruments and services for micro, small and medium enterprises (MSMEs), whose current asset base does not allow access to mainstream bank credits or without proof of income to qualify for traditional loans; and
Affordable financing instruments (i.e., personal loans, gold loans) to individuals (i.e., unbanked and/or underserved individuals, including women as a target population).
Mr. Umesh Revankar, Executive Vice Chairman of Shriram Finance Limited, while describing the successful issuance stated “We are delighted by the continued strong participation from the global investor community. Social Impact continues to remain a focus area for the company and we are pleased to have received significant interest for our Social Bond. Social impact is similar to our priority sector with some strict exclusion and has big interest from the international investor community.”

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