Kanoria family-controlled Srei Group is surely set to get cash-rich by the end of this year.
The group would execute initial public offerings (IPOs) of two companies - Bharat Road Network and Srei Equipment Finance - by March, chairman and managing director Hemant Kanoria said.
While the IPO of Bharat Road Network, a portfolio of six BOT (build, operate and transfer) road projects, would happen this month, Srei Equipment Finance is likely to hit the market by the fourth quarter of this fiscal. Together, these offerings would help the group raise close to Rs 2,700 crore.
"The road project IPO would happen by the end of this month. The prospectus has been filed and approved by Sebi (Securities and Exchange Board of India). The issue of Srei Equipment would be done by year-end," Kanoria told DNA Money.
On the other hand, Srei Equipment Finance, the wholly-owned subsidiary of Srei Infrastructure Finance, would be diluting a maximum of 25% of the post-issue paid-up equity share capital through a combination of fresh issue of shares and offer for sale by parent Srei Infrastructure Finance, thereby raising Rs 1,800-2,000 crore.
Of this, how much flows into the coffers of Srei Infrastructure Finance depends upon the ratio of fresh shares of the company and offer for sale by the promoter, Kanoria said.
In its toll-road special purpose vehicle Bharat Road Network, the group is offloading 35% stake by way of listing. "Overall we are expecting Rs 700 crore to come in," vice-chairman Sunil Kanoria had earlier told analysts.
After Bharat Road Network IPO, Srei would file documents with Sebi for public issue of Srei Equipment Finance, with a target to place shares with anchor investors later in the year.
"Once we file the DRHP (draft red herring prospectus), we would go to the market (for anchor investor) during December-January," Hemant said.
Interestingly, the fate of these two companies and future performance of both these IPOs would depend upon the road sector.
"It's actually the roads where most of the infrastructure spending is happening. There has been a structural improvement in the road sector, with stalled projects being terminated and re-bid, exits (by investors) have been relaxed while there has been new addition of roads network. With this, equipment sales growth is expected to grow by 20-25%. If one grows with that only, even with no addition in market share, the portfolio can be doubled in a short time," Devendra Vyas, chief executive officer of Srei Equipment Finance said.
BIG-BANG PLANS
- The IPO of Bharat Road Network would happen in August this year
- Srei Equipment Finance IPO is likely to hit the market by the fourth quarter
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