Twitter
Advertisement

Srei to divest stake in Sahaj, may bring in strategic partner

Has got a mandate from investors to pump in up to Rs 500 crore annually. Would also look at divesting some of its investments in road projects

Latest News
article-main
Hemant and Sunil Kanoria
FacebookTwitterWhatsappLinkedin

As Sahaj e-Village Ltd, Srei Infrastructure's initiative to bridge the urban-rural digital divide failed to bear fruits, the company has reworked its business model and is now exploring ways to divest its stake in the entity it had floated for the IT project.

Srei had set up Sahaj about eight years ago to tap the potential that the then government's National e-Governance Plan presented. It gave the company an opportunity to set up village-level IT-enabled service centres for people to access the e-governance services.

With the initiative not picking up as expected, Sahaj suffered losses. However, it is now trying to cash in on the consumption boom in the rural areas by tying up with companies like Reckitt Benckiser to provide high in-demand products. It is also contemplating tying up with e-commerce firms to provide last-mile connectivity in the rural areas, Srei chairman and managing director Hemant Kanoria had recently told dna.

To tap the hinterlands, Sahaj is strengthening its network from 26,627 centres in six states a year ago to 39,087 centres across 25 states at the end of February. It plans to set up another 70,000 centres by March, and it wants an investor to partner this expansion.

The disinvestment in the associate company could be done either by bringing in a strategic partner or a financial investor. Srei management, led by the Kanorias, is exploring all the available options. The company expects to complete the divestment during the current fiscal year.

"During this year, our focus would be releasing of capital in our Sahaj portfolio. We intend to go to the market and examine what would be the appetite. We are open to looking for in what form and manner we can get investors, be it strategic or financial investors," Srei Infrastructure vice-chairman Sunil Kanoria has told analysts.

"We are Ebitda positive month-on-month basis. We have pruned the costs. We are seeing volumes of trade increasing as we are adding on services," Sunil said during a conference call.

While latest figures are not available, Srei held 48.32% in Sahaj as on end FY15. It had also put in Rs 10.51 crore equity investment in addition to advanced loans amounting to Rs 209 crore to Sahaj till FY15. Also, Srei got a mandate from investors to pump in up to Rs 500 crore annually into the business to sustain it.

Sahaj's divestment would follow Srei's disinvestment of its stake in Viom Network to American Tower Corp resulting in an inflow of Rs 2,931 crore for Srei.

During the current year, Srei would also look at divesting some of its investments in road projects.

"We have investments in six road projects of which 5 are operational. In one, we have a full majority and in the others, we have 40-49%. Many of our partners are also open to exit. So, we are exploring a couple of opportunities to release our capital out of these investments either through the sale of these individual assets or on a consolidated basis. There are multiple ways we are exploring with bankers and investment community," Sunil said.

Srei's investment is Rs 350 crore in the form of equity in roads.

Find your daily dose of news & explainers in your WhatsApp. Stay updated, Stay informed-  Follow DNA on WhatsApp.
    Advertisement

    Live tv

    Advertisement
    Advertisement