Srei Infrastructure Finance has reported a consolidated net loss of Rs 3,810.93 crore in the third quarter of the current financial year on account of higher and accelerated provisioning.
It had reported a net profit of Rs 60 crore in the year ago period. During the quarter ended September, it had reported a net profit of Rs 4.72 crore.
The higher provisioning comes on the back of a special audit recently conducted by the Reserve Bank of India into the company and its subsidiary, Srei Equipment Finance.
Consolidated total income during the quarter ended December fell sharply to Rs 484.35 crore from Rs 1,418.20 crore in the year ago period; consolidated assets under management (AUM) stood at Rs 41,298 crore compared to Rs 45,157 crore at the end of December 2019. The board met on Saturday to take on record the results for the quarter.
Commenting on the results, Hemant Kanoria, chairman Srei, said that the current financial year has been one of the most challenging years in the company’s history of more than three decades.
“The Covid-19 induced stress on our asset quality coupled with the credit squeeze in the NBFC sector have created an unprecedented situation, which none of us had anticipated. As a matter of prudence and taking into consideration the current operating environment, we have decided to increase our provisions significantly,” he added.
Kanoria also said that the company had recently moved the National Company Law Tribunal (NCLT) to make payment to all creditors in an orderly fashion.
Srei recently decided to freeze interest payment and redemption of non-convertible debentures (NCDs) and was granted relief with a moratorium order by the tribunal.
Kanoria said, “We hope that with the support from creditors, rating agencies, regulators and other agencies of the government, the company can meet its repayment commitments and continue to serve the nation in the infrastructure space.”
The focus during this quarter and in the next few ones, he said, will be to get the recoveries from clients so that the creditors can be paid as per the scheme.
“The company has had a track record of being punctual on its interest and principal payments for the last thirty-one years. This is the first time in the history that such a situation has arisen due to the pandemic. We remain confident that the measures taken will help us emerge out of the current conundrum and we will continue to create value for all our stakeholders in the long-run,” Kanoria further said.