Shriram Transport Finance has given a guarantee of Rs.870 crore, for its unlisted subsidiary.

According to the annual report released by the firm, the company has provided a guarantee of Rs.870 crore for non-convertible debentures (NCDs) issued by SVL, an unlisted entity belonging to the financial conglomerate.

Further, analysts at the firm wrote in their report, “Cash flows at SVL, subsidiaries may be inadequate to service the NCD, but other companies within Shriram group may potentially refinance/aid in repayment. However, if SVL defaults on the NCDs and the guarantee is invoked, potential hit to Shriram Transport’s BV could be around 4% post tax (Rs.29/ share).”

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