By Srei Infrastructure Finance Limited (“Srei”), one of India’s largest holistic infrastructure institutions, today announced that it has decided to augment the capital of both its infrastructure finance and equipment finance businesses, which will facilitate the businesses in maintaining and strengthening their current leadership positions further.
The move will result in listing of the company’s equipment finance business through a composite scheme of arrangement and amalgamation (“Scheme”) and give shareholders of Srei an opportunity to directly participate in the high growth equipment finance sector.
The board of directors of Srei at a meeting held here today approved the Scheme, which is subject to regulatory, statutory and other necessary approvals.
Commenting on the development, Mr. Hemant Kanoria, Chairman and Managing Director, Srei, said: “In our journey of three decades, we have been creating significant value for our shareholders. Today’s decision will lead to substantial increase in net shareholders’ fund and allow shareholders of Srei to directly hold shares of both infrastructure finance and equipment finance businesses. The move is value accretive for our shareholders as they will have monetizable assets in form of listed shares of both the businesses.
The proposed capital augmentation scheme is expected to further infuse around Rs 500 crore in our equipment finance business and will pave the way for multi-fold growth in its revenue and profit. Global and domestic investors will also be able to take advantage of the opportunities in the high growth equipment finance sector by directly investing in our equipment finance business.”
The growth in the infrastructure space, propelled by the government’s substantial budgetary allocation in road, irrigation, mining, railways, ports, affordable housing and other infrastructure sub-sectors, has improved the growth prospects of infrastructure finance and equipment finance businesses. In last few years, there has been significant growth in sales of construction, mining and allied equipment (“CME”) and the industry expects the demand to remain strong in coming years. This has made the capital augmentation programme of both infrastructure finance and equipment finance businesses pertinent.
Srei is one of India’s largest holistic infrastructure institutions, constantly and consistently delivering innovative solutions in the infrastructure sector. The company has been playing a significant role in nation-building for three decades, both in urban and rural India. Srei’s businesses include Infrastructure Project Finance, Advisory and Development, Infrastructure Equipment Finance, Alternative Investment Funds, Capital Markets and Insurance Broking. Srei is headquartered in Kolkata and has presence across India.