Srei Infrastructure is looking to raise Rs 750-1,200 crore by diluting stake in Bharat Road Network Limited (BRNL), as part of the lender’s strategic investment portfolio.
Srei is looking to dilute between 25 and 30 per cent stake in BRNL. According to Hemant Kanoria, chairman and managing director, Srei Infrastructure Finance, the company would look at options like initial public offering, private equity investment and infrastructure investment trusts for stake dilution.
“The stake dilution is a part of Srei’s business model. Wherever we make investments, we dilute through primary or secondary transactions. Moreover, road projects have started looking up, and hence we see good opportunities in the sector,” Kanoria said.
Srei manages road projects, through BRNL, mostly under the BOT (build-operate-transfer) model. So far, it has executed 14 road projects, translating close to 5,400 lane km of road projects.
At present, the company’s portfolio includes nine road projects, comprising approximately 3,776 km worth Rs 9,918 crore. Of these nine projects, five are under construction and four are operational.
As part of Srei’s long-term strategy to periodically rejig its investment portfolio, the lender had in October 2015 said it would be selling its 18.26 per cent stake in Viom Networks to American Tower Corporation for Rs 2,952 crore. Notably, Srei’s investment in Viom was Rs 1,598 crore.
In December 2015, Srei announced that BNP Paribas Lease Group, a 100 per cent subsidiary of the BNP Paribas Group, had decided to sell its 50 per cent stake in Srei Equipment Finance Limited (SEFL) to Srei Infrastructure Finance. In exchange, BNP Paribas acquired five per cent stake in Srei Infrastructure Finance, which will now be the parent company of SEFL. “For 2016-17, our focus will be on road projects. After that we will look into other verticals like Srei Sahaj,” Kanoria said.
Thus after road projects, Srei’s next stake dilution could be in Sahaj e-Village Limited, which has rural e-kiosks providing services such as micro-insurance, education and utility bill payments, said Kanoria.