SHRIRAM Transport Finance (STFC), the country’s largest asset financing non-banking finance company, plans to provide working capital support to truck operators in addition to the regular hire purchase financing to new and pre-owned trucks. Group chairman R Thyagarajan told ET that truck operators were sourcing working capital finance at high cost. They required Rs 30,000 to Rs 40,000 every month to meet various expenses like buying tyres and other components, maintenance and service charges, settling cargo bills and others.STFC has over 4 lakh truck operators as its customers and it wants to provide low-cost finance to them using its pan-India network of 300 branches. “We feel that in a year, we can build a working capital portfolio of Rs 1,000 crore. We are talking to institutions and investors for raising funds”. He expected this finance to account for 25% to 30% of total disbursements over a period. It plans to offer many customer-related products which will meet the working capital needs of its customers like tyre finance, accident insurance, engine reconditioning and change finance. This year, STFC is expecting a 40-50% growth in disbursements at Rs 10,000 crore against Rs 6,500 crore in 2006-07.
The chairman said that following the pooled insurance scheme for third party claims in motor vehicles introduced in the post-detariff regime, leading private insurers were approaching NBFCs for selling commercial vehicles insurance. The portfolio size is pegged at Rs 3,000 crore.
Earlier, only public sector insurance companies were providing the cover. Referring to Shriram life insurance, a joint venture with Sanlam life of Africa and launched in May 2005, he said it collected a gross premium of Rs 180 crore last year, but incurred only Rs 25 crore as expense. With operations in five states, it targets a premium of Rs 300 crore this year. Mr Thyagarajan said the group is also gearing to enter non-life insurance business along with Sanlam this year. The JV, Shriram general insurance, will be based at Jaipur. It hopes to get R1 licence from Irda soon. It will focus largely on retail segments like motor vehicle insurance, health, travel and so on.