Srei Infrastructure Finance to raise up to Rs 2,500 crore equity capital

Plans to issue one or more instruments through public offer, QIP, private placement, preferential or rights issue

Srei Infrastructure Finance said on Wednesday that its board has approved raising up to Rs 2,500 crore of capital.

The company said that it plans to raise capital by way of issue of one or more instruments through public offer/qualified institutional placement/private placement/preferential issue/rights issue. The board at its meeting held today passed a resolution to this effect.

Also, Srei Equipment Finance has received a term sheet from Singapore's Makara Capital Partners for investment of Rs 2,200 crore by way of capital and a term sheet from USA-based Arena Investors LP for investment of Rs 2,000 crore.

The Strategic Coordination Committee (SCC), comprising independent directors, is evaluating the proposals and taking necessary steps, the company said.

The company has also received expressions of interest (EoIs) from several other global private investment firms, including from Cerberus Global Investments, Charlestown Capital Advisors, CarVal Investors LP, Varde Partners Asia Pte Ltd and Maystone Capital.

“Many investors have expressed their desire to invest in Srei, which has been supporting and financing India's construction and infrastructure sectors for the last 32 years as one of the leading financial institutions,” the company said.

Srei also announced its results for the March quarter and year ending March.

For the quarter ended March, Srei posted a consolidated net loss of Rs 3,555.19 crore compared to Rs 69.29 crore in the corresponding quarter last year, on higher provisioning. Total income was at Rs 593.68 crore as against Rs 1,610.36 crore a year back.

Srei made consolidated provisions of Rs 5,513 crore during the year ended March 31, 2021, which it said was in compliance with the regulatory requirements on provisioning. The provisioning was done over Q3 and Q4.

During Q3, the Reserve Bank of India had conducted a special audit into Srei Infrastructure and Srei Equipment Finance.

The higher provisioning impacted profitability of Srei and it posted a consolidated net loss of Rs 7,338.39 crore in the year ended March 31, 2021. Consolidated total income during the year was Rs 3,487.54 crore and the consolidated assets under management (AUM) was at Rs 39,498 crore as on March 31, 2021.

Srei said that the outbreak of coronavirus and the peaking of the second wave had severely affected MSME construction companies and infrastructure companies. With infrastructure activities slowing down and arbitration awards getting delayed, cash flows of Srei’s borrowers had been affected, which had created a mismatch in Srei’s cash flows.

However, Srei said that the loans were backed with assets and cash flows and it was confident of making significant recovery once the macro situation stabilised.