Shriram Finance Launches Green Finance Vertical, Eyes Rs 5,000 Crore AUM in 3-4 Years

In a bid to consolidate its green financing business, Shriram Finance Limited, a financial services company, has launched a new vertical to manage all its commitments to green financing. The newly-launched Shriram Green Finance plans to build on the group's existing portfolio of green financing, mostly focused on electric vehicles (EVs) and explore opportunities beyond this segment.

In particular, Shriram Green Finance would focus on financing electric vehicles (EV), battery charging stations, renewable energy and energy efficient machinery. With the launch of a dedicated vertical for green finance, the group is seeking to leverage its extensive customer base, particularly in semi-urban and rural areas. The move, states the company, would help consolidate its efforts in the green financing space.

In a press release issued on December 20, Umesh Revankar, executive vice-chairman of Shriram Finance, said, "This initiative is a testament to aligning our strategies with the global shift towards a greener economy and we are charting a course for long-term value creation that balances profitability with purpose."

Shriram Finance is targeting assets under management (AUM) of Rs 5,000 crore ($588 million) over the next three to four years under the portfolio. It also plans to raise funds from domestic and international sources, focusing on green investments.

At the initial stage, Shriram Green Finance will focus on building its EV portfolio in Karnataka, Kerala, Delhi NCR and Maharashtra. The company is actively engaging with original equipment manufacturers (OEMs) to establish long-term partnerships.

India's EV sector is undergoing rapid expansion, driven by ambitious government policies, technological advancements and growing environmental awareness. EV sales, charging infrastructure sector is growing rapidly, with massive advancements in fast-charging and battery-swapping technologies.

While India’s energy efficient machinery segment is still at a nascent stage, its renewable energy sector has experienced remarkable growth over the past decade, driven by ambitious government initiatives and a growing focus on sustainability. The company plans to tap into this vast resource of opportunities.

Shriram Finance, a flagship company of Shriram group with AUM worth over Rs 2.43 trillion, was established in 1979. The company has a pan-India presence with more than 3,000 branches across the country.