Srei BNP Paribas, the 50:50 equipment financing joint venture company between Kolkata-based Srei Group and French financial major BNP Paribas, is looking at an equity infusion of around Rs 250 crore, to be contributed equally by both the partners.
The capital infusion would be required to maintain 25-30 per cent growth in business, said D K Vyas, CEO, Srei BNP Paribas.
Notably, the company had decided to go for capital infusion in March, but the plan is yet to be frozen due to a marked slowdown in the equipment finance business. Last year in June, the company had an equity infusion of Rs 50 crore each from both the partners.
Earlier, Vyas had said that the company was looking to raise Rs 300-500 crore by March 2012.
Currently, the joint venture company has assets under management worth close to Rs 17400 crore. The company's total disbursement last year was close to Rs 12170 crore, a rise of almost 50 per cent over the last year.
“Due to the economic slowdown, the equipment finance business is having a slow business growth. The industry is not expecting more than 15 per cent growth this year, against the earlier estimate of 25-30 per cent. The equity capital will help us increasing our business, but due to the slowdown, we are not in a hurry to raise the capital.” said Vyas.
At present, the company's capital adequacy ratio is close to 17 per cent, which is slightly above the regulatory requirement of 15 per cent. Thus, an enhanced equity would enable the company to meet the growth target of 30 per cent.
In the equipment finance business, the net non performing assets rose from 1.78 per cent to 1.96 per cent last financial year.
Srei BNP Paribas is the largest construction and mining equipment financier in India, with a customer base of over 28000.
