Shriram Finance Share Price In Focus After Parag Sharma Discloses Future Plans

Parag Sharma, Chief Financial Officer and Managing Director of Shriram Finance, has stated that India’s biggest truck financier is seeking to raise a loan of $250 million over the next 3 years domestically. Excessive market volatility and increasing hedging costs overseas have driven it away from offshore loans, thereby marking a notable change in its capital-raising strategy. 

Growth of Credit Demand

In December 2024, Shriram Finance obtained a multicurrency loan worth $1.3 billion to finance its double-digit credit growth. In Q3 of FY 2024-25, its loan book recorded a year-on-year growth of 19%, with total credit lent reaching ₹2.5 trillion. The expected growth of the agricultural sector during FY 2025-26 can increase the Shriram Finance share price. 

Focus on MSMEs

As per the Small Industries Development Bank of India, Indian MESMEs have witnessed a 2x growth in credit demand over the past 5 years, which is currently estimated at ₹70 lakh crore. However, banks have formally lent them only ₹20 lakh crore, which pinpoints a significant credit gap of nearly ₹50 lakh crore. 

Shriram Finance plans to increase lending to Indian MSMEs, which account for 30% of India’s Gross Value Addition to the GDP. Parag Sharma also said, “We are seeing good demand from Tier 2, Tier 3 Indian cities for loans”, thereby indicating his intention to boost company’s presence in rural areas and driving business growth. 

Favourable Steps Taken By RBI

Last week, the Reserve Bank of India reduced the risk weights on loans lent by microfinance institutions and NBFCs from 125% to 100%. This is expected to reduce funding costs for high-rated shadow banks like Shriram Finance. Moreover, the company is expected to witness a 25% growth in credit demand, which is expected to favourably impact its share prices. 

Conclusion

Shriram Finance, widely regarded as India’s largest truck financier, is expected to benefit from increasing infrastructure development in rural areas and the growth of the MSME industry. As regulatory frameworks ease and credit demand rises, the bank is expected to witness steady growth. 

As of March 5, 2025 (12.39 PM), Shriram Finance’s share price was ₹632.75 on the Bombay Stock Exchange. 

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