The Hindu Business Line : Get the equipment on loan and bid for interest rates

JUMBO AUCTION: SREI Infrastructure Finance Ltd organised the auction of interest rates on loans to purchase 500 pieces of construction equipment worth Rs 250 crore on display in Hyderabad on Wednesday. About 600 bidders took part in the unique event. - H. Satish

Hyderabad , Aug. 31

SREI Infrastructure Finance Ltd has brought the third edition of `Paison ki Nilami' (auction of interest rates) to Hyderabad, offering finance to buyers of construction equipment at an interest rate that can be bid by them.

"Participants can bid for the lowest interest rates for loan, hire purchase, lease or rent of infrastructure equipment," Mr R. Sunil Kanoria, Director of SREI, said.

The first two editions were held in Kolkata and Bhubaneshwar in the last nine months. They generated significant business volumes.

While customers could get access to cost-effective finance to acquire important equipment, the finance company could get a huge business in just one evening. For the equipment manufacturers, it was a windfall as they met a group of 600 serious customers. Srei expected a business volume of Rs 150 crore at the auction.

Addressing a press conference here on Wednesday on the sidelines of the auction, Mr Kanoria said products of top original equipment manufacturers such as Volvo, JCB, Ingersoll Rand, Tata Motors and Schwing Stetter were put on auction.

The organisers roped in television star Aman Varma and film actress Yukta Mookhey to conduct the auction this time.

About 500 pieces of equipment were put on display.

Explaining the auction procedure, he said the organiser would come out with a certain rate of interest for a particular piece of equipment.

If nobody raised hands, the organiser would reduce the rate a bit. If there were no takers, the rate would go down further. The downward auction would end when, say, a few customers showed interest. "To select the winner, we will start reverse auction (upward)," he said.

The bidding would boil down to those who needed that particular type of equipment.

The company, however, did homework to select the participants. "We did due diligence and picked people after assessing their credit worthiness. We also take deposits at the time of registration. Depending on the credit worthiness, they get (colour) grades that give them leverage in bidding for certain equipment," he said.

The credit-worthiness ranged from Rs 50 lakh to Rs 5 crore.

Srei managed assets worth Rs 2,500 crore, with 85 per cent interests in equipment financing. "During the first quarter of this fiscal, we registered new business worth Rs 600 crore and a net profit of Rs 10 crore," Mr Kanoria said.

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