New Delhi, September 28, 2023 – DCM Shriram, a prominent player in the sugar, fertilizer, and chemical industries, has successfully secured a Sustainability Linked Loan (SLL) of INR 200 crore from HSBC India. The funds obtained through this strategic financial move are earmarked to support the company’s ongoing capital expenditure initiatives in Bharuch, Gujarat, as part of its commitment to sustainable growth and development, as stated in an official statement.
Amit Agarwal, Executive Director & Group CFO of DCM Shriram Ltd, expressed the significance of this milestone by saying, “This marks our first Sustainability Linked Loan obtained from HSBC India, underscoring our unwavering dedication to our Environmental, Social, and Governance (ESG) objectives. We have undertaken projects valued at approximately INR 3,500 crore, with a predominant focus on our sugar and chemical divisions. Notably, projects in our sugar business have already been commissioned, while those in the chemicals business are nearing completion.”
The loan signifies a pivotal step in DCM Shriram’s mission to align its financial strategies with sustainability goals, reflecting its commitment to responsible business practices and environmental stewardship. By choosing to secure a Sustainability Linked Loan, the company is demonstrating its proactive approach to financing that rewards and encourages sustainability achievements.
Ajay Sharma, Head of Commercial Banking at HSBC India, emphasized HSBC’s commitment to providing financing solutions that foster and incentivize the transition towards a more sustainable economy. Sharma noted, “This collaboration between DCM Shriram Ltd and HSBC India signifies a shared commitment towards fostering sustainability and responsible business practices, further solidifying their dedication to a greener and more responsible future.”
DCM Shriram’s investment in sustainability reflects the global shift towards environmentally conscious business practices and the growing emphasis on ESG factors in the corporate world. Such initiatives not only contribute to long-term business resilience but also align with broader environmental and social objectives.
The Sustainability Linked Loan is structured to incentivize DCM Shriram’s sustainable achievements. Typically, such loans involve specific sustainability targets and performance indicators that, when met, can lead to favorable terms, such as reduced interest rates or extended loan tenures. These terms serve as a tangible demonstration of the company’s commitment to its ESG goals.
As part of its sustainability efforts, DCM Shriram has been actively pursuing projects within its sugar and chemical divisions. These projects are aimed at enhancing operational efficiency, reducing environmental impact, and contributing to a more sustainable future. With the projects in the sugar business already commissioned and those in the chemicals business nearing completion, the company is making significant strides towards achieving its sustainability milestones.
This strategic collaboration between DCM Shriram and HSBC India not only reinforces their commitment to sustainability but also sets an example for responsible and environmentally conscious financing in the corporate sector. It highlights the importance of aligning financial strategies with ESG objectives and paves the way for a greener, more sustainable future in the business world.
