Shriram Finance Limited has completed the settlement of its tender offers for U.S.$750 million and U.S.$500 million senior secured notes due 2027 and 2028, respectively. The NBFC purchased $459.98 million in aggregate principal amount on September 30, 2026, marking the conclusion of its strategic liability management exercise.

The tender offers expired on September 28, 2026. Investors tendered a total of $931.52 million across both series, exceeding the maximum acceptance amounts set by the company. Consequently, the offeror applied proration factors to limit the buyback to the predetermined caps of $300 million for the 2027 notes and $160 million for the 2028 notes.

Tender Results and Proration Details

The high level of investor participation resulted in oversubscription for both note series. The company accepted a portion of the validly tendered notes based on specific proration factors to align with its maximum acceptance limits.

Financial Consideration and Settlement

Shriram Finance paid an aggregate consideration of $479.07 million on the payment date of September 30, 2026. The payment includes the purchase price, additional interest payments, and accrued interest. The settlement was conducted under the USD 3.5 billion Global Medium Term Note (GMTN) Programme, in compliance with Foreign Exchange Management (Borrowing and Lending) Regulations, 2018.

• 2027 Notes: Purchase price of $1,000 per $1,000 principal, plus additional interest of $11.50 per $1,000 principal.
• 2028 Notes: Purchase price of $1,000 per $1,000 principal, plus additional interest of $13.00 per $1,000 principal.

Following the settlement, the outstanding principal amounts were reduced to $450.02 million for the 2027 notes and $340 million for the 2028 notes. The accepted notes have been retired and cancelled.

What the Numbers Show

The tender results reveal strong demand from bondholders to exit their positions in Shriram Finance's medium-term debt. The 77.26% tender rate for the 2027 notes and 70.42% for the 2028 notes indicate that a significant majority of holders preferred immediate liquidity over holding the bonds to maturity. This high participation rate, combined with the company's decision to cap purchases at $460 million against nearly $1 billion in tenders, suggests a disciplined approach to cash management while addressing near-term refinancing risks or optimizing interest costs.

Shriram Finance has received penalty orders totaling approximately ₹7.5 crore from the Additional Commissioner of Central GST & C. Ex, Navi Mumbai, for fiscal years 2020-21 through 2022-23.

The penalties were levied under Section 74 of the CGST Act, 2017, read with corresponding provisions of the MGST Act, 2017, and Section 20 of the IGST Act, 2017. These orders pertain to show cause cum demand notices against the erstwhile Shriram City Union Finance Limited, which amalgamated with the company effective April 1, 2022.

Nature of Violations

The demand arises from two primary categories of tax discrepancies identified by the authority:

1. Non-payment of tax under Reverse Charge Mechanism (RCM) on services rendered by service providers.
2. Ineligible Input Tax Credit (ITC) availed on invoices issued by automobile and motor vehicle dealers.

The company stated that there is no material impact on its financial, operational, or other activities. However, out of commercial prudence, it awaits an opinion from its tax consultant regarding the Maharashtra state demand orders received on September 22, 2026.

Penalty Breakdown by Fiscal Year

The following table details the tax demand and penalty levied for each fiscal year across the two violation categories:

What the Numbers Show

A distinct pattern emerges when analyzing the penalty structure across the three fiscal years: the penalty amount levied is exactly equal to the tax demand amount in every instance. This suggests that the authority imposed a 100% penalty on the disputed tax amounts rather than a graduated fine. Furthermore, the total exposure shows a significant upward trajectory, with the combined demand and penalty for FY23 (₹3.14 crore) being more than double that of FY21 (₹1.21 crore), indicating that the volume or value of transactions subject to these specific GST compliance issues increased substantially over the period prior to the amalgamation.