SREI EQUIPMENT LOOKS TO RAISE ₹2,000CRORE THROUGH IPO

KOLKATA: Srei Equipment Finance Ltd, a wholly-owned subsidiary of Srei Infrastructure Finance Ltd, is looking to raise ₹1,800-2,000 crore through an initial public offering (IPO) of 25% of the company’s shares, key officials announced on Thursday.

The public issue, which is estimated to value Srei Equipment Finance at ₹7,200-8,000 crore, will include new shares to be sold by the company as also shares to be sold by the already listed holding company. The IPO is expected to be launched by February-March next year, group chairman Hemant Kanoria said. Within the next three years, Srei Equipment Finance, which offers loans for purchase of construction and mining equipment, is looking to double its assets under management, said CEO Devendra Vyas. At the end of June, it had assets worth ₹23,453 crore on its books, a fifth more than a year earlier.

The equipment financing business had witnessed a considerable jump in demand recently, Kanoria said. For the past few years, equipment financing business has been growing annually at 20-22%, he added.

Vyas said asset quality has been improving and after some disruption, the company has started to generate steady cash flows. “Investors like steady businesses with steady cash flows,” he said. “So, we thought, it is a good time to unlock value.”

In 2016-17, Srei Equipment Finance clocked ₹2,495.33 crore in revenue and a net profit of ₹148.84 crore. The company currently has an equity base of ₹59.66 crore.