CHENNAI: DSP Merrill Lynch Capital has committed to pick up $200 million (about Rs. 925 crore) worth of truck portfolio from Shriram Transport Finance Company during the current financial year. The first tranche of $100 million had already been disbursed and the remaining would be disbursed during the third quarter.

This is the first such deal that Merrill Lynch has clinched in the commercial vehicle finance space in India. And, it is also considered the single biggest disbursal to any NBFC doing truck financing. The deal with Shriram Transport is a part of the DSP Merrill Lynch's vision to create a financing platform for itself in areas like truck transport, real estate and retail.

R. Sridhar, Managing Director of Shriram Transport, said on Monday the company had done portfolio sales earlier to big names like Citi, UTI and ICIC Bank. "This is, however, the biggest deal done by the Shriram Group," he said. Following the deal, the asset portfolio concerned would go off the balance sheet of Shriram Transport.

However, the company would be responsible for managing the assets concerned. The funds raised through part-sale of its asset portfolio to DSP Merrill Lynch would go to "help small truck owners get easier access to funds, thereby helping the modernisation of the trucking fleet of the country," R. Thyagarajan, Chairman of the Shriram group, said.

Mr. Sridhar said the portfolio buying by DSP Merrill Lynch pertained to the current year. He indicated that this could result in more such buys from Merrill Lynch.

The funds managed by the company had increased from Rs. 2,500 crore in March 2002 to Rs. 7,500 crore in March 2006. "We are looking to doubling the portfolio in four years," Mr. Sridhar added.

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