Srei seeks churn in investment portfolio

May dilute stake in Quippo and Viom

Srei Infrastructure Finance Limited is looking to churn its strategic investment portfolio, which includes diluting stakes in companies such as Viom Network and Quippo Rentals and picking up strategic stakes in infrastructure projects.

The company was scouting for new acquisitions in the power and road sectors, said Hemant Kanoria, chairman and managing director, Srei Infrastructure Finance. Currently, Srei has three broad business verticals — equipment finance (joint venture company called Srei BNP Paribas), project finance and strategic investments.  

“We would like to optimise the value of our strategic investments. We have nearly seven to eight such investments. We will dilute stake in them from time to time. Whenever we find a good opportunity, we will exit. At the same time, we will be looking at new acquisitions in sectors such as power and roads,” said Kanoria.

Two of Srei’s biggest investments include Viom Networks and Quippo Rentals. Viom is a Tata Teleservices and Srei Infrastructure joint venture, while Quippo is one of the largest equipment rental companies in the country, which focuses on sectors such as construction, oil and gas, energy, valuation and auctioning of old equipment.

“For Viom, we are looking at all options like roping in strategic investors or an IPO (initial public offering). We are also exploring the option of (an) infrastructure investment trust for the company,” said Kanoria.

Srei is looking to increase its presence in the power sector by becoming a holistic distribution-cum-generation company.

The Kanoria family forayed into the power sector in 2003 with the incorporation of India Power Corporation Limited (IPCL), where it holds a nearly 60 per cent stake. The company expects to start a 450-megawatt (Mw) thermal power plant in Haldia, West Bengal, by the next financial year.

“We want to be an integrated power company. Both in the power and roads sector, we see growth coming through acquisitions. In the next one and a half years, we will see nearly 20-30 projects come up for sale in the market. In the power sector, we see projects ranging from 100-1,500 Mw up for sale. We would be looking at acquiring one or two,” said Kanoria.

In the roads sector, where Srei has nearly 13 projects in its portfolio, the company is exploring the opportunity for an IPO or an infrastructure investment trust.

In addition, in the project and equipment financing side, Srei is planning to raise between Rs 2,000-3,000 crore through instruments such as non-convertible debentures by the end of this financial year.