1:5 Stock Split: NBFC stock jumps 3% after company sets record date

The large-cap NBFC focuses on commercial vehicle financing, primarily targeting trucks ranging from older models to newer ones. The stock has jumped by 2.86 percent after the company set the record date for a 1:5 stock split. 

Stock Price Movement: 

In Monday’s trading session, Shriram Finance Limited’s share jumped to an intraday high of 2.86 percent from the previous close of Rs. 2,871.75. The stock opened at Rs. 2,929.05 and is currently trading at Rs. 2,915.55, with a high of Rs. 2,953.90 and a low of Rs. 2,909.60. The market capitalization now stands at approximately Rs. 1,09,641.82 crore. 

What Happened: 

Shriram Finance Limited has set Friday, January 10, 2025, as the “Record Date” to determine the entitlement of equity shareholders for the split of equity shares. Shareholders approved splitting one Rs. 10 equity share into five equity shares of Rs. 2 each, fully paid-up equity shares. 

Future Outlook 

The company anticipates a growth of 17 to 18 percent in its commercial vehicle portfolio over the next two quarters. It plans to maintain its focus on its existing customer base, with 97 to 98 percent of loan disbursements allocated to current customers. 

Products and Services 

Shriram Finance offers a diverse array of financial products, such as commercial and passenger vehicle financing, two-wheeler loans, gold loans, personal loans, SME financing, and home loans through its subsidiary, Shriram Housing Finance, meeting the needs of both individuals and businesses. 

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Recent quarter results and ratios: 

Shriram Finance Limited’s net interest income has increased from Rs. 3,622 crore in Q2 FY24 to Rs. 4,350 crore in Q2 FY25, which has grown by 20.1 percent. The net profit of Shriram Finance Limited has also grown by 20.15 percent from Rs. 1792 crore in Q2 FY24 to Rs. 2153 crore in Q2 FY25. 

Shriram Finance Limited’s net interest income and net profit have grown at a CAGR of 15.56 percent and 23.49 percent, respectively, over the last five years. 

In terms of return ratios, the company’s ROCE and ROE should be 11.3 percent and 15.9 percent, respectively. The debt-to-equity ratio of the company is to be 3.97x. Shriram Finance Limited’s EPS is to be Rs. 214. 

Shareholding pattern

In September 2024, Shriram Finance Limited had a majority stake held by the promoters at 25.40 percent, foreign institutional investors at 53.29 percent, domestic institutional investors at 16.21 percent, and the public at 5.07 percent. 

Company Overview: 

Shriram Finance Limited, a key player in the Indian non-banking financial sector, is part of the Shriram Group. Formed through a merger in November 2022, the company brings together the strengths of Shriram Transport Finance, Shriram City Union Finance, and Shriram Capital. It offers a broad range of financial services designed to cater to the diverse needs of its customer base. 

Written By – Nikhil Naik 

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