Srei Equipment Finance, the market leader in infra equipment finance space, aims to bring down its gross non-performing asset (NPA) ratio at below 4% by the end the current fiscal as road projects have started to move on the fast lane and the company has been proving customised solutions to its clients.
“Gross NPA came down from 4.98% as on March, 2015 to 4.43% as on September. I expect that it will come down further by March, 2016. I wish if we can have the gross NPA at less than 4% by March,” CEO Devendra Kumar Vyas told FE.
“Road sector’s economy side has started moving, giving us some payments. Also, we are giving logistics as well as customised solutions to our customers,” Vyas said when asked what factors contributed to the lower gross non-performing assets (NPAs) level at the end of second quarter.
During the September quarter, disbursement of the NBFC, a 50:50 joint venture between Srei Infrastructure Finance and French major BNP Paribas, stood at Rs 2,224 crore, up 27% from Rs 1,749 crore in the previous quarter. The disbursement growth mainly came from its new businesses — financing IT, healthcare and agriculture equipment, and used equipment finance.
The company finances construction and mining equipment, apart from used equipment, in the infra equipment finance segment, while in non-infra segment, it finances IT, healthcare and agriculture equipment. Currently, the share of infra equipment finance segment in the firm’s total disbursement stands at 80%.
“During the second quarter, IT equipment segment has grown 100%, while agriculture equipment has expanded by 20% sequentially,” Vyas said.
The company’s net profit stood at Rs 27.62 crore during the September quarter, compared with Rs 22.85 crore in the previous quarter. The company’s asset under management as on September 30, 2015 stood at Rs 18,747 crore.
Backed by good growth in its new businesses, the company aims at doubling its balance sheet in the next three years.
Srei Equipment Finance is planning to raise up to Rs 500 crore tier-II capital via bonds by March. It may also tap overseas market for raising funds.