Srei Infra signs share swap deal with BNP Paribas

Post deal, consolidated net worth of Srei Infra would double from nearly Rs 2,700 cr earlier to about Rs 4,800 cr

Kolkata-based Srei Infrastructure today completed its share swap deal with BNP Paribas, whereby Srei Equipment Finance would become a 100% subsidiary of Srei Infrastructure and BNP Paribas would acquire 5% stake in Srei Infrastructure. The company had announced the deal in December 2015.

Post the deal, the consolidated net worth of Srei Infrastructure would double from nearly Rs 2,700 crore earlier, to about Rs 4,800 crore.

With the consolidation, Srei would be able to increase funding for the equipment finance business under Srei Equipment Finance, as the sector was showing signs of growth in the last few months, said Sunil Kanoria, Vice-chairman of Srei Infrastructure.

According to Kanoria, for the first time since 2012, equipment finance business was showing growth, around 20% per month since the last three-four months. While as on March 2012, the total sale of construction and mining equipment stood at around Rs 34,000 crore, it came down to around Rs 21,000 crore as on March 2016 due to economic slowdown, he said.

"We expect the sale of construction and mining equipment would touch around Rs 35,000 crore over the next three years," said Kanoria.

BNP Paribas Lease Group has received 25.15 million equity shares of Srei, representing 5% of the total paid-up equity share capital of the company, in lieu of its entire shareholding of 29.83 million equity shares of Srei Equipment Finance Limited, representing 50% of the total paid-up equity share capital of Srei Equipment Finance Limited.

In last financial year, Srei Equipment Finance's standalone net profit after tax stood at around Rs 115 crore, while that of Srei Infrastructure Finance stood at Rs 57 crore.