Shares of Shriram Finance rallied over 5 percent on Friday after the company announced that it secured $100 million long-term funding from Asian Development Bank (ADB).
The five-year External Commercial Borrowing (ECB) is under Shriram Finance's social finance framework.
The funds raised from ADB will enable Shriram Finance, a part of the Shriram Group, to provide credit towards the purchase of new and used vehicles throughout India.
Proceeds from ADB will be utilised to finance commercial purposes for BS VI-compliant vehicles as well as electric vehicles, specifically to finance women entrepreneurs.
In addition to the ADB loan, the retail NBFC has raised $250 million from US Development Finance Corporation and $475 million through a 144A Bond from the international market this year.
The counter of Shriram Finance was in focus after 17.4 crore new shares got listed on Thursday following the amalgamation.
The listing added significant supply resulting in some selling pressure on the stock. The counter had fallen over five percent in the intraday session on Thursday.
In addition, the anticipation of two large shareholders -- Piramal Enterprises and TPG India- selling their stake in the company could be another reason for the pressure on the stock, according to dealers.
Analysts believe that this acts as an overhang on the merged entity.
Recently Shriram City Union Finance Ltd. and Shriram Capital Ltd. merged with Shriram Transport Finance Company Ltd. and was subsequently renamed Shriram Finance Ltd.
