analyst meet presentation_15022010

8/7/2019 Analyst Meet Presentation_15022010

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SREI INFRASTRUCTURE FINANCE LIMITED

Anal sts Meet Presentation


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SafeSafe HarbourHarbourIn this communication we have disclosed forward-looking information to enable investors to comprehend ourprospects and take informed investment decisions. This report and other statements written and oral - that weperiodically make contain forward-looking statements that set out anticipated results based on the managements

.anticipate, estimate, expects, projects, intends, plans, believes, and words of similar substance inconnection with any discussion of future performance.

We cannot guarantee that these forward-looking statements will be realised, although we believe we have been. ,

assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions proveinaccurate, actual results could vary materially from those anticipated, estimated or projected. Readers should bear

this in mind.e un erta e no o gat on to pu c y up ate any orwar - oo ng statement, w et er as a resu t o new

information, future events or otherwise.

The information contained herein has been prepared solely for information purposes and is not an offer orsolicitation of an offer to buy/sell the securities/instruments mentioned or to participate in any trading strategy or an

official confirmation.

This is not a research but it may refer to a research analyst/research report. The Company does not represent thatthe information contained herein is accurate or complete. Information is subject to change without notice and wemay not update this. Past performance is not indicative of future returns. This price information (if any) is providedsolely for informational purposes and may differ substantially from price information available from other sources oran actionable price.


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Vision and Mission Statement

Vision

To be the most inspiring global holistic

Mission

To be an Indian multinational companyproviding innovative integrated

infrastructure solutions

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History

Started operations and identified infrastructure sector as the corebusiness

Initial Public Offering. Listed on all major Stock Exchanges1992

IFC, FMO and DEG invested as strategic equity partners1997

1st Indian NBFI to be listed on the London Stock Exchange2005

JV with BNP Paribas Lease Group, 100% subsidiary of BNP Paribas2008

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Board of Directors

NAME PREVIOUS EXPERIENCE

Salil Gupta, Chairman, West Bengal Industrial Development Corp.,

Hemant Kanoria,Chairman & Managing Director President, Calcutta Chamber of CommerceChairman, CII (ER) Infrastructure

Sunil Kanoria, Presently Vice Chairman & Managing Director of Quippo InfrastructureEquipment Ltd.

Saud Siddique,

Jt. Managing Director

Former IFC (World Bank, Washington) , Principal Investment Officer and

East Asia head having vast experience in infrastructure sector. . ,

Wholetime Director

having more than 20 yrs experience in Infrastructure & Core sector

Dr. S.C. JhaChief Economist and Director, Asian Development BankEconomic Advisor to the United NationsMember Prime Ministers Council of Economic Advisors

V.H. Pandya Senior Executive Director, SEBIDirector, GIC Asset Management and Reliance CapitalS. Rajagopal CMD, Bank of India & Indian Bank

a t rc an an ,Executive Director, Kirloskar Oil Engines

S. Chatterjee Executive Director, Axis Bank

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Key Businesses


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Business Verticals

g nd

ure

ure a

rks

ment Banki

ct Advisor

Capital / F

nagement

Infrastruc

sportation

Power

Infrastruct

po Rentals

Industrial

uipment

inancing

Project

inancing

Invest

Proj

Ventur M

Teleco Tra

Rural I Qu

i

SEZ and

EF F

Srei has added business lines such as Telecom Infrastructure and Quippo Rentals through the amalgamationof QIEL


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Equipment Financing

Financing Insurance Broking

Construction, Mining, Oil & Gas,

Power (conventional & renewable),

Life,

Non Life,

Ports, Railways, Aviation, Telecom Reinsurance

Financial Snapshot as on 31 st December 2009

Net Worth (Rs cr.) 936Asset Under Management (Rs Cr.) 8,075NIM (%) 4.76 %Net NPA 0.92%

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CAR 15.75


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Project Financing

Business Overview

Roads Aviation

Ports Telecommunication

Railways Oil & Gas


Net Worth (Rs cr.) 775Asset Under Management (Rs Cr.) 3,890NIM (%) 5.68%Net NPA -

99

CAR 18.90


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Advisory Services

Project conceptualization & Pre-feasibility studies

Project Advisory

Project Monitoring

Investment Banking Debt Syndication Equity Syndication IPOs Mergers, Acquisitions & Valuations

Fund Management (Venture Fund)


Fee Based Income (Rs cr.) 17

1010

Funds Under Management (Rs Cr.) 869


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Infrastructure Investments

SECTOR TOTAL

Strategic Long Term Investments

Subsidiaries 47

Fig in Rs Cr

Joint Venture 25

Quippo ( Treasury Stock) 19

Infrastructure Investments

Transportation 237

Passive Infrastructure - Telecom 337

Port 2

SEZ & Industrial Parks 4

Rural Infrastructure 1

Oil & Gas 30

Investment in Financial Services 22

Quoted Investments 54

Investment in Debt / Debt Funds 66

Total* 859

* Investments held directly or through funds 1111


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Synergistic IntegrationSrei +Quippo


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Synergistic Integration Srei+Quippo

#1Creation of a fully integrated and Holistic Infrastructure Institution bringing all infrastructure businessunder one umbrella equipment financing, project financing, advisory, development and Quipposinfrastructure business

#2 Enhancement of shareholder value

#3#3 Expanded spectrum of infrastructure products & services to customers

#4#4 Wider service portfolio leading to increased degree of business de-risking

#5#5 Create an efficient and functional structure for the businesses, reducing operational costs therebyincreasing profitability

Higher Net Worth to capitalise on future growth potential#6

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QUIPPO

W orld

ecom One of the

largest Gas Provides

state-of- ction Provides

equipment on ental

Provides eco-friendly gas- po

sal

Providesonline &

QuippoTel n epen -

ent tower company in

the world QuippoOil the-art

drillingequipmentalong with po

Constr rentals

alongwithtrained,qualified & po

Energy based power

solutions for short tomedium term

& Asset Dis offline

auctioning &disposalservice for

40,000 #telecomtowers

qualifiedoperators Q

ui

operators Quip rov es gas-

basedcombinedheat solutions Va

luation

machinery

Indias 1st Equipment Indias 1st EnergyIndias 1st Tower Indias 1st IntegratedIndias 1stComprehensive

Rental Company Rental CompanyRental Company Rig Rental Services Equipment & IndustrialValuer

# 31 st March10

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Telecom Infrastructure Business

Quippo Telecom Infrastructure Limited (QTIL) owns and operates the telecom tower business ofthe Group

, ,

QTIL and its shareholders would purchase stake in Tata Group company Wireless TTInfoservices Limited (WTTIL) from existing shareholders : This was completed in August2009

Subsequently, the tower assets of QTIL would be demerged, and merged with WTTIL, andshares in WTTIL would be issued to shareholders of QTIL as consideration

necessary approvals. The Appointed Date for the merger is 1 st April 2009

As of 31 st March 2010, the two companies are expected to have a combined portfolio of~40,000 towers with tenancies of approx 2.0x

Quippos effective economic interest in WTTIL (directly and indirectly) after the demerger, wouldbe approx 9%, and which, combined with Sreis holding in WTTIL, would amount to approx 11.50%stake in WTTIL. Total asset size by March 2010 ~Rs 9,800 cr

Expected to have ~ Rs 5000 cr to 5400 cr of term loans and borrowings by March 2010.

Expected revenues of ~Rs 1652 cr and projected EBITDA of ~ Rs 900 cr by March 2010

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Construction Equipment Rental Business

Provides construction equipment rental services, along with trained and qualified operatingpersonnel to customers

Finance Limited, which also operates in a similar field in four southern states i.e. Tamil Nadu,

Andhra Pradesh, Karnataka and Kerala.

Has a fleet size of ~700 equipment across 7 locations in India, including earthmoving and generalcons ruc on equ pmen , so mprovemen equ pmen , roa cons ruc on equ pmen , concre eequipment, transport equipment and lifting equipment

The business is in a consolidation phase changing its focus from low value retail assets to highvalue assets , which is ex ected to drive revenue and EBITDA mar in rowth oin forward.

Financial Snapshot of FY 09

Revenue 57EBITDA 12Asset Base 339

Debt 184

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Energy Rental Business

The business relates to renting of power generation equipment and heat recovery add-onequipment to SME customers.

Value proposition driven by alternative to "buy" in the area of gas based power generation tousers by putting together containerized equipment to generate power, heat and cooling solutionsdriving reliability and innovation on a 24/7 basis

n a t on to equ pment, a so prov es access to now- ow an support t roug t on-ground personnel who operate the equipment.



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Debt 47


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Oil & Gas Infrastructure Business

QOGIL, directly and through subsidiaries and JVs, operates 4 oil rigs and 1 barge (barge heldthrough a JV, Quippo Prakash Pvt. Ltd. (QPPL) in which QIEL has an effective stake of ~ 38%).These assets are provided on long-term lease contracts to customers, along with operating

personnel and know-how

QPPL has an expected total asset base of ~ USD 122 mn as of FY2010E (with loans of ~ USD 97

QOGIL has been awarded an Oil Block CB-ONN-2005/11 (NELP VII Round) for exploration andproduction in Cambay Basin, Gujarat.



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Debt 64


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Valuation & Asset Disposal Business

Is a 50:50 joint venture with GoIndustry (UK), Ltd.

Has three major lines of services:

Auction services for disposal of construction equipment, commercial vehicles andpassenger cars; also offers services for valuation of construction equipment andmotor vehicles

Auction services for disposal of all other equipment and tools including machine tools,textiles machinery, food processing equipment etc.

Consulting services for valuation and appraisal of above assets, asset management,mar et commentary etc. or c ents

The JV has an equity base of Rs 0.2 cr and is a fee based business with an expectedRevenue of Rs 3.2 cr by March 2010.

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Transaction Details

Srei Infrastructure Finance Limited (Srei) is proposing an amalgamation of QuippoInfrastructure Equipment Limited (QIEL) to create a single focused entity to capitalize on theinfrastructure development opportunities in the country (Transaction)

Appointed date for the merger is April 1, 2010

Timeline: Expect to complete by Q2-FY11

Shareholding Pattern post Merger*

Domestic VentureCapital, 11.52%

Treasury Stock, 9.66%

Promoters

Promoters, 46.22%Private Corp

Bodies, 3.50%

NRIs / OCBs, 2.71%

Mutual Funds

FIIs

Banks & Others

Indian Public

FIIs, 14.42%

Banks & Others, 0.06%

Indian Public, 6.91%

, .

GDRsPrivate Corp Bodies

NRIs / OCBs

Domestic Venture Capital

Mutual Funds, 4.88%

2121* Assuming shareholding of SIFL as on 31 st December 2009


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Transaction Details

The consideration to the shareholders of QIEL would be through issue of shares in Srei Valuers have recommended a share swap ratio of 3:2, i.e., 3 shares of Srei to be issued for every 2 shares held

in QIEL, while the Fairness Opinion providers have provided a fairness opinion certifying this ratio to be fair

Treasury stock created against 16.85% stake in QIEL held by Srei prior to the merger

Key Advisors for the transaction include:Transaction Advisors: Kotak Mahindra Capital Company Limited; DBD Business Solution (P) Ltd

. .

Valuation Report: KPMG India Private Limited; BDO Haribhakti Consulting Private Limited

Legal Advisors: Amarchand & Mangaldas & Suresh A. Shroff & Co.

Due Diligence: Ernst & Young Pvt. Ltd.; Amarchand & Mangaldas & Suresh A. Shroff & Co. Further, Srei proposes to issue 4 bonus equity shares each for every 5 equity shares held by its shareholders,

as on the Record Date under the Scheme of Amalgamation. The bonus shares will be issued to shareholders ofSrei prior to Amalgamation. The swap ratio will be adjusted accordingly

Share issue workings:

Srei Current Shares Outstanding 11.6 cr

QIEL Expected Shares Outstanding* 10.9 crSrei shares outstanding post bonus 20.9 cr

ew ssuance at re expecte ue to ama gamat on a uste swap post onus 29.4 crSrei shares outstanding post amalgamation, post-bonus 50.3 cr

* Post conversion of convertible debentures into2.05 mn equity shares in QIEL

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Financial Statement Q3 FY10Srei Infrastructure Finance Limited (Consolidated)

Disbursementfor the Qtr

Fig in Rs Crs Quarter Ended Nine months endedIncome Statements Details 31 st Dec09 31 st Dec08 31 st Dec09 31 st Dec08

Income from finance activities 241.84 164.80 622.25 553.26 ,Finance charges 136.35 129.14 370.41 359.98

NII 105.49 35.66 251.84 193.28

Fee based income 8.30 1.82 16.86 73.47 578%

DisbursementYTD

Rs 6,168 cr

er ncome . . . .

Total Income 121.20 47.80 298.28 286.12

Operating Expenditure (incl. depreciation)46.08 27.64 130.39 149.50

7.18 4.79 17.89 15.18

PBT 67.94 15.37 150.00 121.44

Tax 22.63 6.64 40.50 42.89

PAT 45.31 8.73 109.50 78.55

25%

sse n erManagement

Rs 12,162 cr

Key Indicators Q3 FY 10 Q3 FY 09NIM % 5.14% 3.56%

ROE 19.87% 13.10%. .

EPS (Rs) 12.59 8.97 21%

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Financial Statement Q3 FY10Srei Infrastructure Finance Limited (Standalone)

Fig in Rs Crs Quarter Ended Nine months endedIncome Statements Details 31 st Dec09 31 st Dec08 31 st Dec09 31 st Dec08

Income from finance activities 116.41 38.93 281.40 169.63

Disbursementfor the Qtr

Finance charges 68.54 41.46 155.08 117.37

NII 47.87 2.48 126.32 52.26 Fee based income 5.81 15.82 10.41 63.26 Other Income 5.07 3.16 11.37 20.66

74%

Total Income 58.75 16.50 148.10 136.18

Operating Expenditure (incl. depreciation) 15.91 12.53 45.46 60.72

Provisions 0.00

0.00

0.00

0.00

DisbursementYTD

Rs 2 266 cr . . . . Tax 14.34 1.62 22.53 24.66 PAT 28.50 2.35 80.11 50.80

Key Indicators Q3 FY 10 Q3 FY 09

211%

NIM %5.68% 3.83%

Gross NPA Net NPA ROE 14.53% 9.91%

sse n erManagement

Rs 3,890 cr

Leverage 3.92 1.78 EPS (Rs) 9.20 5.8392%

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Thank You

Srei Infrastructure Finance LimitedVISHWAKARMA

Phone: +91 33 3988-7734

Fax: +91 33 2285 7542 / 8501

86C, Topsia Road (South),

Kolkata 700 046, INDIA

[email protected]

www.srei.com

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