India's Shriram Finance mulling yen-denominated fundraise to diversify borrowing, CEO says
"Our team is exploring a possibility if we can borrow from the Japanese (currency)," YS Chakravarti told Reuters in an interview. "This could be either from a bank or an international bond issue, which corporates can subscribe to."
Shriram Finance is "still exploring the market", Chakravarti said, without divulging the target or timing of the fundraise.
External commercial borrowing loans made up nearly 15% of Shriram's total borrowing profile as of March-end, while overseas bonds comprised about 6.8%.
In December, the NBFC raised $1.28 billion in a multi-currency social loan split across the dollar, euro and dirham, with a tenor of up to five years.
On Friday, Shriram Finance reported a smaller-than-expected fourth-quarter profit as high finance costs pressured its bottom line. The company's shares fell as much as 9% on Monday.
Shriram Finance is targeting AUM growth of around 17%-18% for 2025-26, higher than its earlier guidance of 15%, Chakravarti said.
As of March-end, Shriram Finance's assets under management (AUM) increased by 17% year-on-year and stood at 2.63 trillion rupees ($30.96 billion).
The NBFC is looking to bank on its passenger vehicle and small and medium enterprise loan portfolios to drive its AUM growth, the CEO said, while also exploring new products, such as unsecured business loans and supply chain financing.
Shriram Finance is also looking to deploy the excess liquidity of about 300 billion rupees on its balance sheet, which will help drive net interest margins in the 8.50%-8.80% range for the current financial year, compared with 8.25% in January-March, Chakravarti added.
"Since we are sitting on excess liquidity we will be in a position to actually bargain for an attractive rate. We see our cost of borrowings to trend lower from current levels," he added.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
26 minutes ago
- Reuters
Lockheed profit dives 80% on $1.6 billion charge, shares tumble
July 22 (Reuters) - Lockheed Martin (LMT.N), opens new tab reported on Tuesday that its second-quarter profit plunged by about 80%, after the U.S. defense group recorded a pretax loss of $1.6 billion, mainly linked to a classified program within its Aeronautics segment, sending its shares down more than 8%. The company also trimmed its 2025 profit outlook by $1.5 billion or 18% and said it now targets $6.65 billion in operating profit for the year. This new guidance, revised down since the company's last estimate in April, did not include potential impacts from tariffs which have affected other defense companies with international customers. Lockheed's tariff risk is relatively low, as its supply chains and labor are largely domestic, said Brian Mulberry, portfolio manager at Zacks Investment Management. The company's hefty charge stemmed from difficulties with a classified program in its Aeronautics business and international helicopter programs in its Sikorsky unit. Defense contractors are grappling with mounting cost pressures as inflation and supply chain disruptions drive up expenses on long-term programs priced years ago. Many of these contracts — often fixed-price — were negotiated before the post-pandemic surge in labor, material, and component costs, forcing contractors such as Lockheed to absorb overruns. Apart from the $950 million charge on the classified program, Lockheed took a $570 million hit on its work for the Canadian government relating to the procurement of its CH-148 Cyclone maritime helicopters. The Turkish Utility Helicopter Program (TUHP) saw a $95 million loss as well. This charge was due to a restructuring caused by U.S. government sanctions on Turkish entities and persons involved in the program, Taiclet said in a call with analysts. Lockheed is also engaged in a tussle with U.S. tax authorities who assert the company owes an additional $4.6 billion tax bill, executives said, adding they were pursuing a remedy that could include litigation. Additionally, the company provided an update on progress with upgrades on its F-35 jets, saying it had completed hardware integration and released new software on the fleet. Earlier this month, the Pentagon's program office confirmed the final delivery of 72 jets held in long-term storage in 2024. Lockheed's net income in the quarter fell to $342 million, or $1.46 per share from $1.64 billion, or $6.85 per share, a year earlier. Excluding these charges, the group posted an adjusted profit of $7.29 per share, beating an average estimate of $6.44 per share according to data compiled by LSEG. Lockheed missed Wall Street estimates for second-quarter revenue, which came in at $18.16 billion, compared with an average expectation of $18.57 billion.
Reuters
an hour ago
- Reuters
Dassault, in spat with Airbus, says European fighter jet project at risk
PARIS, July 22 (Reuters) - French warplane maker Dassault Aviation ( opens new tab raised questions over the future of a Franco-German-Spanish fighter jet project on Tuesday in a growing feud with Europe's Airbus ( opens new tab over control of the futuristic program that combines traditional warplanes with automated drones. CEO Eric Trappier said the Future Combat Air System, widely known under its French initials SCAF, needed clearer leadership and organisation as partners move towards a second phase that calls for a flying model to prove its cutting-edge technology. SCAF is one of several so-called sixth-generation fighter projects expected to combine traditional crewed warplanes with a cohort of uncrewed and armed drones. Britain is working on a similar proposal with Italy and Japan known as GCAP. Dassault, which builds France's Rafale warplanes, is in charge of efforts to come up with designs for the core fighter, one of several "pillars" in the hugely complex SCAF project. Trappier said that in practice, decisions over key parts of the current design phase were having to be cleared with Airbus, adding complexity and contributing to delays. "They say Dassault is the leader but that all decisions must be taken between three (countries)," Trappier said at a half-yearly earnings conference. Airbus, which represents both Germany and Spain in the project with Dassault backed by France, declined comment. Asked if Dassault was threatening to leave the SCAF project, Trappier indicated the programme's wider future was at stake. "It is not a question of leaving SCAF but of deciding if it continues or not," he said. However, he strongly denied reports that Dassault was seeking 80% control. Dassault and Airbus, two historic European industry rivals called on to work together after French President Emmanuel Macron and then German Chancellor Angela Merkel launched the initiative in 2017, have squabbled repeatedly over handling of the project to replace current warplanes by 2040. The latest comments came on the eve of a Berlin summit between Macron and German Chancellor Friedrich Merz that are expected to touch on the status of the defence project, according to a French presidential adviser and industry sources. Airbus Defence & Space CEO Michael Schoellhorn told the Paris Air Forum last month that governance had been agreed and that Airbus, a leading partner in the Eurofighter Typhoon, had a history of successful cooperation with other defence firms.
Reuters
2 hours ago
- Reuters
Musk's xAI to raise up to $12 billion in debt for AI expansion, WSJ reports
July 22 (Reuters) - Elon Musk's artificial intelligence startup xAI is working with a financier to secure up to $12 billion more for its expansion plans, the Wall Street Journal reported on Tuesday, citing people familiar with the situation. Valor Equity Partners, an investment firm whose founder, Antonio Gracias, has close ties to Musk, is in talks with lenders to raise the capital, according to the report. The money would be used to buy a massive supply of advanced Nvidia (NVDA.O), opens new tab chips that would be leased to xAI for a new huge data center meant to help train and power its AI chatbot Grok, the WSJ reported. Valor and xAI did not immediately respond to Reuters' requests for comment. Some lenders want the debt to be repaid within three years and to cap the amount of money borrowed in order to limit their risk, the report said. Training and deploying advanced AI systems is expensive, requiring costly hardware, intensive compute and skilled engineers in a highly competitive market where rivals such as OpenAI, Google and China's DeepSeek are trying to dominate the technology. XAI is training Grok on 230,000 graphics processing units, including Nvidia's 30,000 GB200 AI chips, in a supercluster, with inference handled by the cloud providers, Musk said in a post on X on Tuesday. He added that another supercluster will soon launch with an initial batch of 550,000 GB200 and GB300 chips. The AI startup was expected to burn through about $13 billion over the course of 2025, according to media reports. Earlier this month, the Financial Times reported that xAI was in talks to raise more money in a deal that could value the AI startup between $170 billion and $200 billion. In response, Musk had said xAI was not seeking funding. "We have plenty of capital."
