SREI Infra hits 5 per cent lower circuit despite Rs 2,500 crore fundraising plans

The shares of SREI Infrastructure Finance Ltd hit the lower circuit during Friday’s afternoon session despite the company’s plans of raising significant capital. 

The company’s board of directors in a meeting held on July 1, 2021, decided to raise Rs 2,500 crore by way of issuing one or more instruments through a public offer/qualified institutional placement (QIP)/private placement/preferential issue or rights issue.

In a press release to the exchanges, the company also revealed that it received a term sheet from Singapore’s Makara Capital Partners for an investment of Rs 2,200 crore by way of capital and another term sheet from United States-based Arena Investors LP for an investment of Rs 2,000 crore. The company’s Strategic Coordination Committee (SCC) is currently evaluating the proposal and taking the necessary steps.  

The company has received an expression of interest (EOI) from several other global private investment firms, including Cerberus Global Investments, Charlestown Capital Advisors, CarVal Investors LP, Varde Partners Asia, and Maystone Capital, the company added in its filing.    

The second wave of the pandemic crisis severely affected MSME construction & infrastructure companies as infrastructure activities significantly slowed down in addition to the delay in claims & arbitration awards. The cash flows of borrowers have been affected, which created a mismatch in the company’s cash flows for the first time in 32 years.    

SREI has made consolidated provisions of Rs 5,513 crore during the year ended March 31, 2021, which impacted the profitability. The company reported a consolidated net loss of Rs 7,338.39 crore in the year ended March 31, 2021.   

At 3.13 pm on Friday, the stock was trading at Rs 12.86, down by 4.95 per cent or Rs 0.67 per share. The 52-week high is recorded at Rs 18.39 while its 52-week low is Rs 5.01 on BSE.