SREI Infrastructure Finance Ltd. plans to sell stake stake in its subsidiary, SREI Equipment Finance Ltd.(SEIL), through an initial public offering.
The company will dilute up to 25 percent of its paid-up equity capital via the IPO, SREI Infrastructure said in a stock exchange filing on Thursday. It will also constitute an IPO committee to take decisions relating to the IPO, including the appointment of advisors, investment bankers and legal counsels. The share sale will be subject to market conditions, approval of shareholders and other relevant authorities.
“SREI Infrastructure will sell some of its shares in SREI Equipment Finance. So it will get some cash and will also raise some primary money into SREI Equipment Finance for its growth capital,” Sunil Kanoria, vice chairman of SREI Infrastructure told BloombergQuint in a phone interview. The proceeds of the share sale will be used primarily for capital growth and leverage, Kanoria added.
The equipment finance unit has seen a turnaround in the last one year, Kanoria said, citing sequential improvement in business growth and reduction in non-performing loans.
All the parameters have started to show better signs after quite some time and that is what is giving us good positive mood that things are getting better and it will continue.Sunil Kanoria, Vice Chairman, SREI Infrastructure
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