Srei Equipment Finance chalks plans for $250-million ECB

Taking advantage of the proposed relaxation in the norms on external commercial borrowings (ECB), Srei Equipment Finance is looking to raise funds to the tune of at least $250 million from the route.

Earlier, NBFC-AFCs (non-banking financial companies-asset finance companies) could only utilise ECB funds on imported equipment. Recently, under the draft on new guidelines on ECBs, the Reserve Bank of India (RBI) proposed to allow NBFCs to use ECB to fund domestic equipment.

“RBI recently issues draft guidelines on availing rupee loan from overseas. We will be approaching the overseas market for the loan. To begin with, we might raise close to $250 million,” said Devendra Kumar Vyas, chief executive officer, Srei Equipment Finance at a press meet here on Friday.

As on September 30, the total assets under management of the company stood at Rs 18,747 crore. In the last quarter, the disbursement by the company grew by 27 per cent from Rs 1,749 crore in the first quarter of FY16 to Rs 2,224 crore. The growth was registered mainly in the segments of information technology, health care, rural and pre-owned equipment financing.

About 80 per cent of the loan book is from the infrastructure vertical, while the rest is from verticals like IT, healthcare, pre-owned and farm equipment finance. The company is eyeing to double its business in the next three years. The company is also looking at increasing the share of non-infrastructure equipment finance to 30 per cent of its loan book by the end of next year.

Srei Equipment Finance is a 50:50 joint venture between Srei Infrastructure Finance and BNP Paribas Lease Group.  For the quarter ended September 2015, the company posted profit after tax of Rs 27.62 crore, against Rs 22.85 crore in the quarter ended June 2015. The figure for the corresponding quarters in the previous year was not available for comparison.