Srei Equipment Finance, a 50-50 joint venture between Srei Infrastructure Finance and BNP Paribas Lease Group, may tap overseas market for raising funds.

According to Devendra K Vyas, the company’s Chief Executive Officer, it is awaiting final norms from the Reserve Bank of India (RBI) before it can explore options of raising money overseas either through external commercial borrowings (ECBs) or  through “rupee term loan” options.

“The final guidelines from the RBI are awaited. Once the guidelines are laid down, we will look at the possibilities of raising funds from overseas markets,” he told media persons today.

Earlier, NBFC-AFCs (asset finance companies) could only use ECB funds on financing imported equipment.

Recently, under the draft on new guidelines on ECBs, the RBI is supposed to have allowed NBFCs to use ECB to fund domestic equipment.

Srei Equipment Finance has during this fiscal raised Rs 300 crore tier 2 capital through bonds ; and another Rs 410 crore from issue of redeemable non convertible debentures.

It is also planning to raise another Rs 500 crore through NCDs, according to a recent notification to the BSE.

  Improved Contribution  Srei Equipment is also looking at improved contribution from its non-infra equipment lending business. According to Vyas, non-infra equipment lending is expected to account for nearly 30 per cent of overall business in the coming fiscals.

“Currently, infra equipment financing accounts for 80 per cent of our portfolio. The remaining 20 per cent is from non-infra sectors. But with increased opportunities, the percentage of non-infra lending might increase to 30 per cent, in another two years time, ” he said.

Having entered the non-infra segment some years ago, the company’s portfolio currently includes IT, healthcare and rural infra equipment financing. This apart, it has a pre-owned equipment financing business, too.

The move was initiated as a part of the risk-mitigation process taken up by the lender following the slowdown in construction equipment financing.

Srei Equipment had assets under management of Rs 18, 747 crore in FY15. The company reported an over 50 per cent dip in net profit to the tune of Rs 50 crore for the quarter ending September 30, 2015.

Net profit in the year-ago-period stood at Rs 103 crore (apprx). Total income remained flat at Rs 1,297 crore.  

comment COMMENT NOW