Shriram Transport Finance Company Limited has successfully priced a $500 million through bond issuance in the international bond markets. STFC’s bond transaction also marks the first international public social bond issuance from India. This marks the 4th successful USD bond issuance by the Company since the relaxation in the ECB guidelines. the money generated through the market will be used for generating new employment opportunities, the company said in its regulatory filing.

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Speaking on the matter Umesh Revankar, Managing Director and CEO at Shriram Transport Finance Company said, “We are delighted by the continued strong participation by the global investor community. Social Impact continues to remain a focus area for the company and we are pleased to have received significant interest in our inaugural Social Bond. The social impact is similar to our priority sector with some strict exclusion and has big interest from the international investor community.”

STFC’s inaugural Social Bond issuance is guided by STFC’s Social Finance Framework which is aligned to the ICMA Social Bond Principles. The proceeds from the bond would be used for employment generation including through MSME financing and microfinance. STFC has obtained a second party opinion from Sustainalytics describing the social bond framework as “credible and impactful” and an Independent Limited Assurance Report from KPMG.

The Company engaged investors in Hong Kong, Singapore, London and the US through a series of calls. On the back of strong investor feedback, the transaction was launched with initial price guidance of 5.375% area. Following a strong book build supported by high-quality long-only investors, the Company was able to tighten pricing by 27.5bps to 5.100%.  

The bond got an overwhelming response from investors with the final order book in excess of USD 2.20bn and oversubscription of  >4x. The transaction witnessed 50% participation from US, 37% from Asia and 13% from EMEA with 85% investment from asset managers, 5% from banks, 5% from Insurance and 5% from private banks and others. The order book received interest and demand from marquee Social Bond Investors.

Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Emirates NBD Capital, HSBC, ING, JP Morgan and Standard Chartered Bank acted as Joint Bookrunners and Joint Lead Managers.