“The process of syndication is going on as the terms are not yet finalized,” said one of the persons cited above.
Loans may be offered on three-year or five-year maturities. They would be priced after adding a spread over the London Interbank Offered Rate (LIBOR).
“We are regaining business normalcy with on-lending coming up fast,” said Umesh Revankar, managing director at Shriram Transport. “We are looking to raise long-term money with five-year maturity. This will put us in good stead as we are getting into a busy business season.”
The company, which primarily lends for second-hand truck purchases, increased its assets under management (AUM) by 6.75 per cent in the June quarter this financial year to Rs 1.19 lakh crore.
Hero FinCorp did not comment on the matter. The company may raise anything between $100-200 million, sources said.
A group of banks including HSBC, Citi, Axis Bank, Deutsche and Standard Chartered Bank are likely to be involved in the fundraising.
Individual banks could not be contacted immediately.
Many non-banking companies have been trying to tap offshore markets to raise money.
Shriram Transport is likely to raise about $400 million with a five-year maturity.
The six-month US-based LIBOR, a popular global gauge, is now yielding around 0.16 percent. Shriram’s loans may be priced in the range of 4-4.50 percent. The gauge was at 2.90 per cent nearly three years ago.
The drop in global rates has created an opportunity for companies with reasonable creditworthiness to raise funds at record low rates.
Globally, interest rates are still benign but are showing signs of uptick with the US Federal Reserve hinting at tapering the available liquidity.
“NBFCs are also coming back to the market, though slowly,” Emkay Research said in a note.
A few weeks ago Moody’s changed Hero FinCorp’s outlook to ‘stable’ from ‘negative’ following a change in the sovereign rating outlook.
On a consolidated basis, HFCL, a retail and commercial non-bank lender, reported a net profit of Rs. 52 crore on a total gross asset base of Rs. 31,276 crore in FY2021 against a net profit of Rs. 278 crore on a total gross asset base of Rs. 28,092 crore in FY2020, show data from ICRA Ratings.
