Srei Infrastructure Finance is looking to raise ₹1,200 crore for two of its group companies. Of this, ₹500-1,000 crore will be for associate company Bharat Road Network (BRNL), and ₹150-250 crore for Sahaj e-Village.
According to Hemant Kanoria, Chairman and Managing Director, Srei is considering diluting its stake in BRNL. Fund-raising options will include bringing in a private equity investor or floating an IPO. Finalisation and fund-raising are likely to be completed in a year’s time.
“Although we have begun work on preparing the information memorandum and red herring prospectus, the option of bringing in a PE is also open. We do not know which will finally work out. We hope to get the funds this fiscal,” Kanoria told
BRNL, with a project portfolio of over ₹9,900 crore, operates under the build-own-transfer (BOT) model with interests in operations and maintenance of road projects. It has nine such projects (mostly through special purpose vehicles) covering nearly 3,800 lane km. Five of the projects are under construction while four are operational.
According to Kanoria, with the BJP-led government coming to power, roads is one sector that has “come on track”, with issues being ironed out.
“The projects that BRNL does are mostly collecting tolls. So, once the projects are completed, there is not much intervention. In many projects, toll collections have started. So, revenue generation is there,” he said.
Sahaj fund raising In the case of Sahaj e-Village, which has been making losses, Srei will consider bringing in private equity or a strategic investor. “We are looking at some dilution. It will also release some investments of Srei,” he said, adding that Sahaj will be EBITDA positive (earnings before interest, tax, depreciation and amortisation) soon.
Sahaj, which operates in rural areas through village-level entrepreneurs and common service centres, is looking to leverage its huge network of 38,000 such centres in 25 States for physical retailing of consumables, as banking correspondents (BCs) to push insurance products, and also to act as collection centres for e-tailers.