Srei Infra to transfer lending assets into Srei Equipment

Srei Infrastructure Finance Limited (Srei) Thursday said it has approved a composite scheme of arrangement for lump transfer of lending business, interest-earning business & lease business into its subsidiary Srei Equipment. The company decided to consolidate the lending business of Srei and Srei Equipment into one entity since the focus for the last four years has been on growing the equipment financing and reducing the infrastructure loan portfolio.

"The process of transfer will be completed in the next 3 to 4 months and there is no need for any major regulatory approvals," Srei chairman Hemant Kanoria said. Henceforth, Srei will retain only its fee-based services, apart from continuing as the holding company for Srei Equipment.

"The proposed transfer will also facilitate the lending entity, Srei Equipment, to attract strategic investors and also prepare the company for conversion into a bank, as and when the RBI decides to allow the conversion," the company said. Total income of Srei stood at Rs 1889 crore while for the income of Srei Equipment was Rs 4366 crore as on March'19.

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, it said.