We have got Sebi approval for listing of our road portfolio and hope to release some capital during this quarter, says Sunil Kanoria
Srei Group is set to come out with the initial public offering (IPO) of its road asset SPV called Bharat Road Network within the next two months, the company has told analysts.
"Regarding disinvestment of road portfolio, the process is on and we hope to raise capital out of that in a month or two. We have got Sebi approval for listing of our road portfolio and hope to release some capital during this quarter," Sunil Kanoria, vice chairman, Srei Infra has told analysts.
Srei Group is offloading 35% stake by listing its toll-road special purpose vehicle (SPV) Bharat Road Network which has a portfolio of six built, operate and transfer (BOT) road projects.
Out of post issue capital base of 8.39 crore shares, Bharat Road is issuing 2.93 crores to outsiders including qualified institutions and anchor investors.
"About Rs 375 crore of capital is expected to get released immediately out of the listing of Bharat Road Network. Many of these road projects are moving towards refinancing. The refinancing is based on cash flow, part of which would get released with which Srei would repay some of the debt further. Overall we are expecting Rs 700 crores to come in, but immediately about Rs 400 crores," Kanoria told analysts.
Partial disinvestment of one of its other businesses, Sahaj eVillage Ltd, is likely to happen by year end.
"The business has started to build well now and we are almost EBIDTA positive now on a month on month basis, and we also expect that with the kind of growth happening in rural India and in financial inclusion, we hope that during this financial year we would be able to release some capital again," he said.
A positive outcome of the implementation of the goods and services tax has been the revival of lease financing as a viable business venture, he said.
"Till the year 2000, we used to only do leases and hire purchases and never used to write loans at all. Then in 2001, we had VAT, interest tax and service tax coming in which killed the leasing business and the entire industry move to loans. With GST coming in and all these taxes getting absorbed, it has revived leasing as a product. We have done our entire home work and expect the entire environment for leasing to evolve."
Deccan Chronicle
Initiation of insolvency process for the media house Deccan Chronicle Holdings might make the revival process difficult for Srei, which now owns the majority stake in the company achieved through debt conversion.
"(Insolvency process initiation) just makes it tougher with more legal hurdles," sources involved in the process told DNA Money.
Deccan Chronicle on Tuesday told exchanges about the appointment of Interim Resolution Professional for the insolvency process with July 19 being the effective date for insolvency commencement.
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