Chennai-based Shriram Group, which is in the process of merging its two non-banking financial companies, is planning to hire additional 2,500 people for the proposed entity over the next 18-24 months, a top company official said on Monday. Last year in December, the diversified financial group announced the merger of Shriram Capital Ltd (SCL) and Shriram City Union Finance Ltd (SCUF) with Shriram Transport Finance Ltd (STFC).
The merged entity, to be known as Shriram Finance Ltd, will be the largest retail finance non-banking finance company (NBFC) in the country.
SCUF’s Managing Director and CEO YS Chakravarti said that currently, the combined employee strength of SCUF and STFC is 51,000.
While STFC has branches in Bihar, Rajasthan, North-East, West Bengal and Odisha, SCUF doesn’t have much presence in these states, he said.
“Once the merger happens, we will recruit people to sell SCUF’s products in these states. We will be adding 2,500 people over the next 18-24 months on the sales, credit and collection sides,” Chakravarti, who is also the Managing Director and CEO-designate of the proposed entity, said.
SCUF offers two-wheeler, commercial vehicle, passenger vehicle, MSME, gold and home loans, whereas STFC has a presence in the commercial vehicle financing business, consumer finance, life and general insurance and stock broking.
In the back offices of SCUF and STFC, he said that there will be the rationalisation of some of the employees, who are going to be re-skilled and moved to the back offices of other group entities.
Chakravarti said that post-merger, the group plans to divide the business into five different geographical areas, each being led by a joint managing director (JMD).
Last week, the group said it received approval for the merger of SCL and SCUF with STFC from the Reserve Bank of India (RBI).
It is now awaiting approval from the insurance regulator Insurance Regulatory and Development Authority of India (Irdai) and Competition Commission of India (CCI), Chakravarti said.
The National Company Law Tribunal (NCLT) has called for the voting of creditors and shareholders of STFC, SCUF and SCL, which is expected to be over by July 7, he added.
“From there, we expect the NCLT to come back to us with an approval anywhere between 60-90 days,” the official said, adding that the merger process is expected to be over by October this year.
The merged entity will have a combined asset under management (AUM) of over Rs 1.5 lakh crore and a distribution network of over 3,500 branches, the group had said in December.
In a note to the exchanges late on Wednesday, Shriram said RBI issued its No Objection to the scheme of amalgamation through a letter dated June 15. In December last year, the boards of various group companies met to approve the merger of SCL and SCUF with STFC.