Shriram Group looking to list insurance arms in two years

The Shriram Group is mulling to list its insurance arms in "a year or two" from now, a top official said on Tuesday.

Umesh Revankar, the executive vice-chairman of Shriram Finance, said that both companies are doing very well and the retail lending-focused company will look at listing them after the businesses achieve a certain scale.

"Both general insurance and life insurance we will be looking at listing may be in a year or two from now. So, once we reach a certain scale, we will do it," Revankar told reporters on the sidelines of a company event here.

He added that both companies are profitable, and it may prefer to list general insurance before the life arm.

When asked about fundraising plans, Revankar said that it may look at an overseas issuance only after the US Fed cuts its rates.

On the domestic front, a slew of options are available to the company including bank loans, securitization and also bond issues, he added.

The RBI measures on hiking risk weights in November last have pushed up the cost of funds, Revankar said, adding that the company is fine with it till the hike is across the board for all the players.

He, however, said that smaller NBFCs are facing fundraising challenges at present but added that the larger ones are not.

The group has put in place senior leadership to start the asset management business, Revankar said, adding that a senior executive from Shriram City Union Finance is helming it and has also hired 2-3 people under him.

It has also received an in-principal nod to enter the asset reconstruction business, where it plans to buy dud retail portfolios from peers, he said, stressing that it will not try to scale up the new business at a quick pace.

When asked about NBFCs' industry body FIDC's ambitions of becoming a self-regulatory organization, Revankar said the RBI-recognised development body is indeed on the path.

He also pitched for NBFCs to be allowed to be a part of the unified payment interface network and added that the Government should be amenable to such a proposal which the industry has put forth.

To a question on the slowdown in passenger vehicle sales, which form the core of the financier's business, Revankar said the trend is not universal and there are segments within the auto industry showing uptick.

The industry has switched from one of high demand to muted demand resulting in a slowdown of high inventories within a short span, and sales during the upcoming festivities will help bridge the gap, he said.

He said auto industry lobby grouping Fada has not held any meeting with the NBFCs over any issues, and opined that they may have some concerns surrounding the tightening of dealer financing by banks and may have met them.

Meanwhile, the company appointed former cricketer and coach Rahul Dravid as an endorser.