Srei Infrastructure Finance and its wholly owned subsidiary Srei Equipment Finance approved a composite scheme of arrangement and amalgamation at a meeting of the board of directors.

The boards of both companies decided to consolidate the lending business of Srei and Srei Equipment into one entity since the focus for last four years has been on growing equipment financing and reducing the infrastructure loan portfolio. The board  has decided to consolidate the lending portfolio in Srei Equipment as the infrastructure loan portfolio stands reduced.

The proposed step will also facilitate the lending entity, Srei Equipment, to attract strategic investors and also prepare the company for a conversion into a bank, as and when the Reserve Bank of India (RBI) decides to allow the conversion. The revised corporate structures will now enable the companies and their management to focus on specific areas of their expertise.

The consolidation will also enhance customer experience, bring in economies of scale, allow the companies to offer their services at competitive rates and provide greater flexibility in accessing capital.

This move is expected to improve efficiency and cost reduction.

Hemant Kanoria, Srei chairman, commented, “The congregation of lending portfolio into Srei Equipment will enable the group to improve efficiency, profitability, customer intensity and also reduce costs substantially. Srei Infrastructure has developed wide expertise and experience in the infrastructure sector in the last three decades, so it will leverage its strength for augmenting fee-based business out of infrastructure advisory, infrastructure structuring and syndication, and other areas such as investment banking, insurance broking and fund management. The steps proposed will also enable to mitigate the risks in the present environment of slowdown in the NBFC and infrastructure sectors. Srei Infrastructure will remain as the 100% shareholder of Srei Equipment.”

Srei Infrastructure Finance delivers innovative solutions in the infrastructure sector and has played a significant role in nation-building for three decades, both in urban and rural India. Its expertise involves infrastructure advisory, structuring and syndication solutions, investment banking advisory, fund management and insurance broking.

Srei Equipment Finance provides construction and mining equipment financing and has an experienced management team with significant expertise in the financial services sector.