The company will de-merge the equipment finance business through a three-stepped amalgamation scheme.
The scheme has been sketched out by reputed financial and legal advisors and its implementation will take six months to one year.
Addressing media persons on Monday, Srei Infrastructure Finance chairman and MD Hemant Kanoria said that the company’s board of directors has approved the proposed scheme and the same is subject to regulatory, statutory and other necessary approvals.
Srei Infrastructure had decided to go for an IPO of the equipment finance vertical. The company had obtained market regulator Sebi’s approval for the same in September last year. The IL&FS crisis, followed by the liquidity crisis in the broader non-banking financial company (NBFC) space in India, and the forthcoming elections compelled the group to put its IPO plan on hold, company officials said.
Srei Infrastructure said in a stock-exchange filing that it will get 10 shares of wholly-owned subsidiary Srei Asset Reconstruction Pvt. Ltd for every 21 shares it holds in Srei Equipment.
Srei Asset Reconstruction, which has applied for a name change to Srei Asset Finance, will seek a listing through the scheme and every shareholder of Srei Infrastructure will get five shares of Srei Asset for one share of Srei Infra.
The company would also augment the capital base of both the infrastructure finance and equipment finance businesses.
“The proposed capital augmentation scheme is expected to further infuse around Rs 500 crore in our equipment finance business and will pave the way for growth in its revenue and profit,” Kanoria said.
He said that global and domestic investors will also be able to take advantage of the opportunities.