Shriram City Union Finance Limited - Karvy

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OUR BUSINESSFrost & Sullivan India Private Limited has used due care and caution in preparing the report titled “Analysis ofMSME Loan Markets for NBFCs – July 2011”. Information has been obtained from sources that Frost & SullivanIndia Private Limited considers reliable. However, Frost & Sullivan India Private Limited does not guarantee theaccuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for theresults obtained from the use of such information. No part of the said report may be published / reproduced in anyform without Frost & Sullivan India Private Limited’s prior written approval. Frost & Sullivan India PrivateLimited is not liable for investment decisions which may be based on the views expressed in the said report.OverviewOur Company is a deposit-accepting NBFC registered with RBI, offering (i) financing for two wheelers, appliancesand other commercial goods, (“Product Finance”), (ii) pre-owned and new vehicle loans, (iii) personal loans, (iv)loans against gold, and (v) loans to the small enterprise finance segment.Our current lines of business and organisational structure are as follows:According to the Frost and Sullivan report titled “Analysis of MSME Loan Markets for NBFCs – July 2011”, ourCompany is the largest small enterprise finance company in India. In the small loan segment (loans of `1 lakh -10lakh) our Company has a dominant share of 95%. Our Company also leads the total Indian micro, small and mediumenterprises market with 53 % share.Our Company was established in 1986 and we have a track record of twenty five years in the financial servicessector in India. Since 2005 we have focused on the retail financing segment. Our Company has been registered as adeposit-taking NBFC with the RBI since September 4, 2000 under Section 45IA of the Reserve Bank of India Act,1934.We are a part of the Shriram Group of companies which has a strong presence in financial services in India,including commercial vehicle financing, consumer finance, life and general insurance, stock broking, chit funds anddistribution of financial products such as life and general insurance products and mutual fund products, as well as agrowing presence in other businesses such as property development, engineering projects and informationtechnology.82
We leverage on the Shriram Group’s ecosystem to reach out to our prospective customers and our focus has been inmaximizing our association with the “Shriram” brand name and the synergies offered by the infrastructure, of otherentities in the Shriram Group. Our customer base over the years has significantly comprised of customers of otherentities in the Shriram Group. The large customer bases and wide-spread network of business outlets of entities suchas, Shriram Transport Finance Company Limited, (one of the largest organized asset financing NBFCs in India), andentities operating under the “Shriram Chits” brand name, has continued to provide us with a large platform of targetcustomers.Over the last 25 years our Company has established a pan-India presence, with 559 branches and 91 other businessoutlets as of March 31, 2011, across 17 states in India, with a significant presence in south India. As on March 31,2011, our total employee strength was 2,318. We operate in a ‘hub-and spoke’ business model, whereresponsibilities from loan origination to recoveries of loans are vested in each of our business outlets, under thegeneral supervision and control of our head office in Chennai. Our business outlet networks are interconnected andeach business outlet is connected to our head office through an ERP platform developed by Take Solution Limited,Chennai.We have demonstrated consistent growth in our business and in our profitability. Our Assets Under Managementhave grown by a compounded annual growth rate, or CAGR, of 46% from ` 250,686.49 lakhs as of March 31, 2007to ` 799,804.88 lakhs as of March 31, 2011. Our capital adequacy ratio as of March 31, 2011 computed on the basisof applicable RBI requirements was 20.53%, compared to the RBI stipulated minimum requirement of 15.00%. OurTier I capital as of March 31, 2011 was ` 119,419.00 lakhs. Our Gross NPAs as a percentage of Total Loan Assetswere 1.86% as of March 31, 2011. Our Net NPAs as a percentage of Net Loan Assets was 0.43% as of March 31,2011.Our total income increased from ` 34,805.91 lakhs in fiscal 2007 to ` 132,091.19 lakhs in fiscal 2011 at a CAGR of45%. Our net profit after tax increased from ` 5,162.16 lakhs in fiscal 2007 to ` 24,058.85 lakhs in fiscal 2011, at aCAGR of 50%. A summary of our assets under management, net non performing assets, total income and net profitafter tax for the corresponding periods specified below are as follows:ParticularsAssets UnderManagementNet Non performingassets` In LakhsAs at March As at March As at March As at March As at March31, 2007 31, 2008 31, 2009 31, 2010 31, 2011250,686.49 336,889.78 462,950.89 521,550.18 799,804.882,561.44 2,495.70 3,590.35 3,322.73 2,982.76For the For the For the For the For theFinancial Financial Financial Financial FinancialYear Ended Year Ended Year Ended Year ended year endedMarch 31, March 31, March 31, March 31, March 31,2007 2008 2009 20102011Total Income 34,805.91 62,318.76 93,393.75 110,284.71 132,091.19Net Profit after Tax 5,162.16 8,763.50 11,700.77 19,425.86 24,058.85Our StrengthsWe believe that the following are our key strengths:Diversified Portfolio of ProductsOur Company’s product portfolio comprises (i) Product Finance loans, (ii) pre-owned and new vehicles loans, (iii)personal loans, (iv) loans against gold, and (v) loans to small enterprise finance segment. Each of our productsdiffers in terms of the average tenor, average yield, average interest rates and average size of loan. As on March 31,2011 approximately 15 % of our Assets Under Management comprised product finance loans, 24 % of our AssetsUnder Management comprised vehicle loans, 9 % of our Assets Under Management comprised personal loans, 28 %83
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Draft ProspectusDated July 21, 2011
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SECTION I : GENERALDEFINITIONS / AB
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TermDebenture Holder (s)Debt Listin
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that notice of such early closure i
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TermROCRTGSSBISCRASCRRSEBIDescripti
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• Emergence of new competitors;
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SECTION II : RISK FACTORSProspectiv
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may be lower than the outstanding l
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and other liberalization measures a
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previous working relationship; succ
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As part of our means of raising and
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24. We may have to comply with stri
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valuation mechanism, which are pers
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Risks Relating to the Utilization o
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As on March 31, 2011, 24 % of our A
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5. Investors may contact the Regist
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Lead Managers:JM Financial Consulta
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Bankers to our CompanyANDHRA BANKCo
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STATE BANK OF BIKANER AND JAIPUR1 s
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warrant. CRISIL is not responsible
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We leverage on the Shriram Group’
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Page 45 and 46: THE ISSUEThe following is a summary
Page 47 and 48: SUMMARY FINANCIAL INFORMATIONThe fo
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Page 53 and 54: ParticularsFor the year ended March
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Page 59 and 60: CAPITAL STRUCTUREDetails of share c
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Page 65 and 66: Sr. No. Name of holder Number ofins
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Page 75 and 76: SECTION IV : ABOUT THE ISSUER COMPA
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Page 81 and 82: wheelers and similar forms of intra
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Page 85 and 86: Growth in CV finance disbursements`
Page 87 and 88: SI.No.YearTotalMSMEs(lakhnumbers)Fi
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Page 99 and 100: Our Company’s ProductsProduct Fin
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Page 103 and 104: maintain low gross and net NPA leve
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Page 107 and 108: Credit RatingAgencyCAREInstruments
Page 109 and 110: TechnologyWe use information techno
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Page 121 and 122: OUR MANAGEMENTBoard of DirectorsThe
Page 123 and 124: Name, Designation,Age and DINNation
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Page 127 and 128: Remuneration of the DirectorsThe in
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Page 133 and 134: OUR PROMOTERProfile of our Promoter
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Page 141 and 142: PIJUSH GUPTA & COC H A R T E R E D
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Annexure IShriram City Union Financ
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Annexure IIShriram City Union Finan
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Shriram City Union Finance LimitedA
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Annexure IIIShriram City Union Fina
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Annexure IVShriram City Union Finan
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Annexure VShriram City Union Financ
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Annexure VIShriram City Union Finan
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Annexure VIIShriram City Union Fina
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Annexure VIIIShriram City Union Fin
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Annexure IXShriram City Union Finan
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Annexure IXC. Cash Credit from Bank
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Annexure XShriram City Union Financ
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Annexure - XIIShriram City Union Fi
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c. Fixed Assets, Depreciation / Amo
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g. Revenue recognitioni. Income fro
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j. Segment reportingThe company ope
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2010 - 20112. Notes to Accounts1. P
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c) Term Loans:i. From Financial Ins
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Changes in the present value of the
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Enterprises havingsignificant influ
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Deferred Tax AssetTiming difference
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Stock Options grantedThe weighted a
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12. SecuritizationThe information o
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c) All Debentures under (a) and (b)
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Balance sheetDetails of Provision f
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(Rs. In Lacs)Enterprises havingsign
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5. Deferred Tax Liabilities/(Asset)
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The details of Series I have been s
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Since the enterprise used the intri
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13.1 Licensed Capacity, Installed c
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) Term Loans:As at March 31,2009(Rs
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Profit and Loss accountNet employee
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The estimates of future salary incr
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7. Related Party DisclosuresRelated
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* Denotes transactions with Shriram
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(Rs. in lacs)As at March 31, As at
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Stock Options grantedSeries I:The w
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15. SecuritisationThe Company sells
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2007 - 20082. Notes to Accounts1. P
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2. Subordinated DebtThe Company has
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The principal assumptions used in d
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6. Related Party DisclosuresRelated
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9. Earnings per shareParticularsYea
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Income Tax/Wealth TaxDisputed Incom
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Stock Options grantedSeries I:The w
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15. SecuritisationThe Company sells
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2006 - 2007B) Notes to AccountsPart
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9. Expenses in respect of common br
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15. Details of Deferred Tax Liabili
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3(Rs. In lacs)As on March 31,Partic
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(Rs. In lacs)ParticularsAmount outs
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7 Investor group-wise classificatio
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PIJUSH GUPTA & COC H A R T E R E D
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Other consolidated Financial Inform
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Annexure IIShriram City Union Finan
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Shriram City Union Finance LimitedC
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Shriram City Union Finance LimitedS
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Annexure VIShriram City Union Finan
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Shriram City Union Finance Ltd.,Ann
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Shriram City Union Finance Ltd.,Ann
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Annexure XIShriram City Union Finan
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(E)InvestmentsInvestments intended
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(K)Segment reportingThe company ope
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) Privately Placed Redeemable Non-C
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Balance sheetDetails of Provision f
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PaymentsEnterprises having signific
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(8) Deferred Tax Liabilities/(Asset
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The details of Stock Option plan ar
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In March 2005 the ICAI has issued a
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As per our report of even dateFor P
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Sr.No.Particulars16. Industrial Dev
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Sr.No.Particulars Date of sanction
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1. to declare and/ or pay dividend
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SECTION VI : ISSUE RELATED INFORMAT
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person, being a nominee, becoming e
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*With respect to applications recei
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e paid on the next working day. Pay
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Please note that failure to do so c
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We may at our discretion redeem the
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other NCDs in their place. The afor
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from the date of receipt of the app
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or entities.Applicants are advised
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3. Filing of the Prospectus with RO
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in the Application Form would be us
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B. Additional ApplicationsAn applic
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12. Allotment Advice / Refund Order
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iii) In the event, there are more t
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SECTION VII : LEGAL AND OTHER INFOR
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within the meaning of section 271 (
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OTHER REGULATORY AND STATUTORY DISC
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ActivityFees payable legal advisors
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(Source: www.bseindia.com)NSEMonth
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Year ended As at 31st March` In Lak
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(ii)NBFCs are not allowed to deal i
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when hire charges are actually rece
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different rates of interest for dif
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Labour LawsThe Company is required
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…Clause (3) of Article 42 at thei
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MATERIAL CONTRACTS AND DOCUMENTS FO
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DECLARATIONWe, the Directors of the
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Shriram City Union Finance Limited - Karvy

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