Srei Equipment Finance plans to dilute 25 percent of its capital

Kolkata, Aug 17 (IANS) Srei Equipment Finance Ltd, a wholly-owned subsidiary of Srei Infrastructure Finance Ltd, on Thursday announced it would dilute 25 percent of its equity and go for a fresh issue of shares, expecting to mop up around Rs 1,800-2,200 crore from the dilution.

"The company plans an initial public offering (IPO) by diluting 25 percent of its equity and go for a fresh issue of shares. We expect to raise anywhere between Rs 1,800-2,200 crore with this dilution which would help the company grow and leverage further," Srei Equipment Finance CMD Hemant Kanoria said at a press conference here.

The company had formed an IPO committee to take all decisions relating to appointment of investment bankers, advisors among others.

Kanoria said the company would be proposing both Offer for Sale (OFS) and fresh issue of shares.

Claiming that the equipment financing market in the country has been growing since the last two years propelled by the government's budgetary allocation in road, irrigation and mining sectors, he said it is the right time to get the company listed.

"The growth on the equipment financing side has been very good. The budget allocation for the infrastructure sector has been substantially increased compared to the previous years. Therefore we thought it would be a good idea to have SREI Equipment Financing listed," he said.

Kanoria said the performance of the company has been improving in terms of profitability, non performing loans, while the NPA has been reducing which has helped the company to close the first quarter of the current financial year with more than Rs 23,453 crore of assets under management, registering a growth of 20.38 per cent over the same quarter of the previous year.

He said capital that would come through the dilution would hep the company grow further for the next few years.

"Being the market leaders in its segment, fresh capital for the company would be very useful for its further growth.We expect to grow it by another 20-30 per cent going further," he added.

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