Shriram Finance floats new arm for green finance business, eyes AUM of ₹5,000 cr.

Shriram Finance Ltd., the flagship company of the Shriram Group, has floated an exclusive business vertical for green financing as part of consolidating all its green financing initiatives under a newly created, Bengaluru-based entity, Shriram Green Finance.

For the green finance vertical, the company has set a target to achieve an Asset Under Management of ₹5,000 crore over the next three to four years, Umesh Revankar, Executive Vice Chairman, Shriram Finance, said in a media conference in Bengaluru on Friday.

He said the company would also raise ‘green funds’ of ₹2,000 crore to ₹3,000 crore to start with, from various domestic and global development financial institutions to fuel and grow its green financing business.

“To begin with, we will analyse the green finance market, build scale, demonstrate and raise green funds which are available globally for 1% or 2% cheaper than other kinds of loans,”‘ stated Y.S Chakravarti, Managing Director and CEO, Shriram Finance.

With the new positioning for green financing, the company would cater to the funds requirements of fast emerging green ventures across diverse business domains in the country, the officials said.

“Shriram Finance has the potential to play a transformative role in green financing. We are trying to create a granular reach to people. We also notice MSMEs are keen to replace their old and fuel guzzling machines with greener and smart machines,” Mr. Revankar observed.

With this, apart from funding EV two and three wheelers, the company would be addressing a wide range of funds requirements from green businesses such as battery charging stations, renewable energy products and solutions, and energy efficient machinery.

Shriram Green Finance would initially focus on building the EV portfolio in Karnataka, Kerala, National Capital Region and Maharashtra. Shriram Finance has been actively engaging with OEMs manufacturing EVs to establish long-term partnerships, ensuring seamless and accessible vehicle financing solutions, Mr. Chakravarti added.

Shriram Finance currently has a 5% share in electric two-wheeler sales and is expecting to touch 30% in the next three to five years. The non-banking finance company has an AUM of over ₹2,40,000 crore, of which green financing currently is a small portion at ₹600 crore, according to officials.