In a surprise to many investors, shares of Shriram Finance Ltd, which settled at Rs 2,828.95 apiece in the previous trading session on Thursday, opened at Rs 569.95 on Friday, indicating about a 80 per cent fall in its price. However, the non-banking finance player was due for a stock split on Friday, January 10.
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The shadow lender traded ex-split in 1:5 ratio, indicating that each share of the company with a face value of Rs10 was sub-divided into five stocks of face value of Rs 2 each. The fall of 80 per cent is possibly indicating that trading apps of certain brokerages might be showing the unadjusted Shriram Finance share price for yesterday.
Adjusted for the stock split, Shriram Finance shares opened 1.32 per cent higher at Rs 569.95 on BSE, before falling to Rs 553 after opening. The total market capitalization of the company stood close to Rs 1.05 lakh crore and the adjusted close for the previous session came in at Rs 562.55 per share.
Shriram Finance had announced January 10, 2025 as the record date for the stock split of its equity shares in 1:5 ratio on January 1, 2025. The shareholders of the company had approved the stock split on December 20, 2024,said the company in a separate exchange filing.
Earlier this month, Shriram Finance raised a total of Rs 510 crore via non-convertible debentures (NCDs) by offering 51,000 NCDs at Rs 1,00,000 apiece, which was the issue and face price of the instrument. The coupon rate for NCDs was fixed at 8.9 per cent per year, maturing on January 4, 2030.
Mumbai-based Shriram Finance is the flagship company of the Shriram Group. It is a financial services company that offers a variety of products and services, including loans, insurance, and investments. It merged Shriram Transport Finance Company, Shriram City Union Finance and Shriram Capital to form Shriram Finance.
In its Q3 results forecast, Kotak Institutional Equities expect Shriram Finance to report loan growth of 4 per cent QoQ and 18 per cent YoY in 3QFY25. Core NIM will likely remain stable QoQ at 10.7 per cent as cost of borrowings peaks out. “Capital gains of Rs14 bn drive reported earnings. The cost-to-AAUM ratio to remain moderate at 2.8 per cent. We pen down credit cost of 2.2 per cent in 3QFY25,” it’s said.
Axis Securities said that healthy disbursement growth to drive steady AUM growth of 18/4% YoY/QoQ and margins are expected to remain steady with a slight negative bias. It sees NII growth to remain healthy. “Opex growth likely to be modest, C-A ratio to be range-bound. Credit costs remain under control. Asset quality expected to remain broadly steady,” it said.
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