The Hindu Business Line : SREI Infra to raise Rs 675 cr thru ECBs

SREI Infrastructure Finance Ltd (formerly SREI International Finance Ltd) plans to raise around $150 million (Rs 675 crore) through external commercial borrowings (ECBs).

Of this, the first application for about $100 million (Rs 450 crore) would be for the company's infrastructure finance operations and the second application for $50 million towards infrastructure equipment finance, according to Mr K.K. Mohanty, Executive Director, SREI.

The company has sought clearance from the Union Government for the $100-million ECB application.

The funds raised will be used to expand the company's domestic and overseas operations. "Domestically, we will focus on rural infrastructure development and also certain areas of urban infrastructure development like water pipe networks and storage facilities," said Mr Mohanty.

At present, the company has presence in equipment financing related to roadways, irrigation, mining and urban development.

Mr Mohanty said the infrastructure equipment industry today was worth Rs 10,000 crore and would grow to Rs 50,000 crore over the next three years. Keeping pace with this growing market, the company is also entering relatively new segments such as providing seaport, airport and material handling equipment.

Russian deals

SREI has overseas presence in Russia and plans to enter the West Asian market. Over the last 18 months, the company has signed over 100 deals in Russia aggregating revenues of about 10 million euros. Volvo, Kamatsu, Caterpillar and Hitachi are some companies that SREI rented equipment to in Russia.

Equipment leasing

When asked about the Indian equipment leasing market, Mr Mohanty said leasing was very tax-sensitive in India, whereas all over the globe, it was the simplest way to create infrastructure. The total market size for equipment leasing in India is around Rs 11,000 crore of which SREI has 35 per cent market share, he said. The company leases infrastructure equipment besides wagons and telecom towers.

"We are encouraging clients to look at equipment lease from usability and affordability perspectives," he said. At present most customers look at owning equipment.

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