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Shriram Transport Finance Right Issue (July 2020) Review

Published on Tuesday, July 21, 2020 by Dilip Davda

Shriram Transport Finance Right Issue (July 2020) Review

Shriram Transport Finance (STFCL), a part of Shriram group of companies, has a track record of over three decades in the commercial vehicle financing industry in India. If focuses in catering to 'First Time Buyers'.

The company is financing for various kinds of commercial vehicles, including passenger commercial vehicles, heavy goods vehicle, light goods vehicle, farm equipments (tractors and harvesters) as well as ancillary equipment and vehicle parts finance, such as loans for tyres and engine replacements, construction equipment vehicles & machinery finance.

Company's network of branches across India has been a key driver of growth over the years. As of March 31, 2020, it had 1,758 branches across India. The company has also established its presence in 844 rural centres as of March 31, 2020,

STFCL is offering 26178777 equity share of Rs. 10 each at a price of Rs. 570 per share as a rights issue in the ratio of 3 shares for every 26 shares held as on record date of 10.07.20. This issue has already opened for subscription on 16.07.20 and is closing on 30.07.20. Full amount is payable on application for this offer. Shareholders accepting full entitlement can opt for additional shares that will be allotted in proportion of availability. The company mulls raising Rs. 1492.19 cr. from this offer. Out of these funds, it will use Rs. 1464.15 cr. for capital base augmenting and the rest (Rs. 28.05 cr.) as issue related expenses.

Post issue, company's current paid up equity capital of Rs. 226.88 cr. will stand enhanced to Rs. 253.07 cr.

This issue is jointly lead managed by ICICI Securities Ltd., BNP Paribas, Citigroup Global Markets India Pvt. Ltd., Credit Suisse Securities (India) Pvt. Ltd., HSBC Securities and Capital Markets (India) Pvt. Ltd., J. P. Morgan India Pvt. Ltd., Axis Capital Ltd., SBI Capital Markets Ltd. while Kfin Technologies Pvt. Ltd. and Integrated Registry Management Services Pvt. Ltd. are acting as registrars to the issue. Post allotment, shares will be listed on BSE and NSE.

For the last three fiscals, on a consolidated basis, STFCL has posted revenue/net profits of Rs. 13443.95 cr. / Rs. 2548.93 cr. (FY18), Rs. 15529.15 cr. / Rs. 2575.68 cr. (FY19) and Rs. 16562.36 cr. / Rs. 2512.27 cr. Thus while its top line has shown growth, bottom line has remained stagnant. Its NAV as on 31.03.20 was at Rs. 799.64 per share.

On share price movements, it was quoted at Rs. 758.20 on the last cum-right trading day (08.07.20), Rs. 721.20 on first ex-right trading day (09.07.20). Its last traded price is Rs. 690.75 (20.07.20).

With this offer price, the company is aiming at a market cap of Rs. 14424.86 cr.

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. Above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in these offers.

(SEBI registered Research Analyst-Mumbai).

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12 Comments

12. Kamaliya jashubhai   I Like It. | Report Abuse |   Link | Nov 16, 2020 10:39:47 PM Reply
Please sar Mene Sriram transport right issues liya he lekin AJ tak mere account me show Nahi huwa he please sar may request may help me
11. T.SIVUDU   I Like It. | Report Abuse |   Link | Sep 29, 2020 11:03:26 AM Reply
I have purchased 25 STFC RTS at the rate rs 108/.after that i applied for 25 shares by paying amount of rs 14250/. by canara bank on line in website on 26th july'; but tilltoday they are not credited the 25 shares in my dmat acct.
10. shriyans jain   I Like It. | Report Abuse |   Link | Sep 13, 2020 1:31:39 PM Reply
i was not eligible for right issues but applied for the same .....now still my amount is showing blocked in my account.....still neither shares allotted nor amount unblocked....already long period gone...kindly guide and help
9. Ashok Goyal   I Like It. | Report Abuse |   Link | Aug 29, 2020 4:31:27 PM Reply
I had applied for 60 right shares of srtf and paid rs.34200/ but the shares have not been credited to my d mat account till date. Kindly help me
8. Amol Chauhan   I Like It. | Report Abuse |   Link | Aug 10, 2020 11:12:36 PM Reply
I had 100 right entitlement in my account I have made payment of 57000 rs but but now it is not showing in my account.so plz help me
8.1. Hrudananda nayak   I Like It. | Report Abuse |   Link | Aug 13, 2020 8:52:55 PM
Same happened to me broker is making mistakes specially sharekhan cheater no1.
7. M V Rao   I Like It. | Report Abuse |   Link | Aug 3, 2020 12:22:49 PM Reply
When will the additional rights issue applied for in shriram transport and paid for in full , will be allotted and credited to my account. What about the balance amount already paid for additional rights share but not allotted, be recredited to me
7.1. Chandra   I Like It. | Report Abuse |   Link | Aug 3, 2020 2:23:57 PM
Likely 6th and 7th of aug. refunds if any will be credited on 7th aug.
6. NARESH   I Like It. | Report Abuse |   Link | Jul 29, 2020 6:34:18 PM Reply
HOW TO INCREASE MY RIGHT ISSUE APPLICATION ?
5. Himanshu   I Like It. | Report Abuse |   Link | Jul 29, 2020 3:19:43 PM Reply
How will NRI apply to Rights of Shriram Transport
4. RAMESH KUMAR SINGHAL   I Like It. | Report Abuse |   Link | Jul 22, 2020 8:14:27 AM Reply
How to apply in right issue
4.2. B.R.Gohel   I Like It. | Report Abuse |   Link | Jul 23, 2020 7:03:14 PM
How and in which bank form to be submitted. Firm no is how to awail.pl guide.
4.3. Himanshu   I Like It. | Report Abuse |   Link | Jul 29, 2020 3:05:21 PM
How will Non Resident Indian Apply for rights of Shri Ram Transport and 30th is the last date.
3. Siva mallam   I Like It. | Report Abuse |   Link | Jul 27, 2020 9:23:35 AM Reply
I accidentally applied for 36 shares .

so I am eliigible for only 3 shares right? should i apply only 3 or how is it ?
2. T S Ram   I Like It. | Report Abuse |   Link | Jul 24, 2020 7:07:02 PM Reply
I already have 2250 shares. I want to apply for Rights Issue July 2020. Where do I get the application form and Prospects.
1. Srinivas   I Like It. | Report Abuse |   Link | Jul 23, 2020 5:31:28 PM Reply
I already apply 500 shares and now any chance to apply for another 500shares