Srei will retain the long-term projectsthe large ones coming up as public-private-partnershipsand let the short-term finances be handled by Srei Infrastructure Development Finance Ltd, a joint venture between Srei Infrastructure Finance Ltd and BNP Paribas Lease Group.
Hemant Kanoria, vice-chairman and managing director of Srei said, Srei Infrastructure Development will finance projects worth Rs 15-crore or less. The projects worth Rs 15-crore and above will be handled by Srei Srei Infrastructure Finance Ltd.
Srei and the new unit are aiming for a combined net worth of Rs 1,400 crore by the end of the current fiscal.
BNP Paribas Lease Group will bring in Rs 775-crore as its capital contribution, while Srei will chip in with Rs 25 crore.
Of the Rs 775 crore, Rs 375 crore will be used to acquire 50% of the equity in the joint venture, while Rs 400 crore will be used towards the valuation of the asset-financing business being transferred to the new JV.
The changes will boost Sreis net worth to more than Rs 500- crore. With the present plan of the promoters to increase their holding by another 15% via an issue of 2.5 crore warrants, Srei's net-owned funds is expected to go up to at least Rs 600 crore by the end of this fiscal. This will take the combined net worth of Srei and Srei Infrastructure Development to over Rs 1,400 crore. Non-banking finance companies (NBFCs) are allowed to leverage up to 10 times their net worth, which multiplies the potential credit portfolio of Srei to Rs 14,000 crore.