srei corporate profile_may 2010

8/8/2019 Srei Corporate Profile_May 2010

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SREI INFRASTRUCTURE FINANCE LIMITED

Corporate Profile


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Sa fe Ha rb o urSa fe Ha rb o ur

In 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 provided

solely for informational purposes and may differ substantially from price information available from other sources oran actionable price.

Exchange Rate : 1 USD = INR 46


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India: A Fast Emerging Economy

Searin economic rowth.

Post 1991-92, the Indian economy has been one of thefastest growing in the world

Indian GDP

Worlds No. 2 emerging market economyby GDP after China

9.4 ercent in 2005-06

9.6 percent in 2006-07,9.0 percent in 2007-08 and6.7 percent in 2008-09 despite economic

slowdownEstimated GDP growth of 7.2% in FY108.5% & 9% growth estimated for FY11 and FY12 respectively

Source: Economist Intelligence Unit, November 2006

Approximately USD 276 billion of Forex Reserves as on May 2010*

India's FDI inflows touched USD 35 billion in 2008-09 whereas FDI inflows since

33

Source :

Reserve Bank of India


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Indian Infrastructure Market

During the Twelfth Five Year Plan, the total investment in Indias infrastructureuring the Twelfth Five Year Plan, the total investment in Indias infrastructuresector is estimated to beector is estimated to be INR 40,992 billion (USD 1,025 billion)INR 40,992 billion (USD 1,025 billion) ##

e even an a es ma e a we wou nee o nves over s. a crore n

infrastructure over the five year period. This was more than double the realised investmentduring the Tenth Plan period. The Plan also recognised that such a large investment ininfrastructure could not be funded from public resources aloneThe strategy forinfrastructure develo ment therefore involved combination of ublic investmentsupplemented by private investments where feasible.

Dr. Manmohan Singh, Hon'ble Prime Minister of India

The Eleventh Plan had estimated an investment of over INR 20,542INR 20,542 bnbn (USD 514(USD 514 bnbn))

Investment in Infrastructure based on sectoral analysis #

# Source: infrastructure.gov.in

Gas Storage Airports Ports Water Supply &

SanitationRailwaysIrrigation Telecom Roads Power

44


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Infrastructure thrust by the Government

Power Ports AirportRoads

investment opportunityof USD 7.74 bn

Investment need ofabout Rs 177 bn USD

investment opportunityof USD 22 bn

Capacity addition of 485mn MT in Ma or Ports


GOIs Vision Power forAll b 2012


6 laning 6,500 km of GQand selected National

4.31bn) formodernisation andredevelopment of 4metro and 35 non metroair orts

and, 345 mn MT in MinorPorts envisaged

Formulated NationalMaritime Development

Hydel power potential of150,000 MW remainsuntapped

Capacity addition of

Highways

4 laning 6,736 km on N-S

& E-W corridors &12,109 km of National

16 greenfield airportsapproved

Rs 45 bn (USD 1.09bn)re uired for u radin

o cy a an es ma einvestment of USD 11.33bn

Under NMDP, 276ro ects identified for

about 78,577 MW and aninvestment of USD 76.34bn targeted during XIthFive Year Plan

g ways

Constructing1,29,707km of new ruralroads, and renewing andu radin existin

CNS-ATM and otherequipment

development of MajorPorts

Mega Power Projects (of4000 MW generationcapacity each) proposed

1,77,726 km

Launched the ambitiousNational HighwayDevelopmentProgramme (NHDP)involving a USD 54.1 bn

investment upto 2012

55


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Infrastructure thrust by the Government

Telecom UrbanInfrastructure MiningRailways

.opportunity in miningequipment duringEleventh Five year plan.

Coal reserves of 20 bn

National Urban RenewalMission (JNNURM) 461projects worth Rs 494.22bn sanctioned

expected to reach 600mn with 200 mn ruraltelephone connections

Pro ected rowth 40%

.needed for constructionof Dedicated FreightCorridors including thetwo projects between

tonnes to be de-blockedfor power projects

100% FDI allowed onautomatic route for coal

MRTS for the 6 metrosand BRTS for 9 smallercities planned underJNNURM

p.a. in next few years

Total investment

projected at Rs 3,141 bn(USD 76.6 bn) of which

um a - e anLudhiana-Kolkata

Plan for 10,300 km ofnew railway lines and

au e conversion of gn e m n ng orcaptive consumption iniron, steel & cementproduction

o a nves men nWater Supply andSanitation projected tobe Rs 2,342 bn (USD57.14 bn)

expec e romprivate sector

Over 150% growth intelecom services is

ro ected in 5 ears

over 10,000 km

Overall Rs 476 bn (USD11.6bn) expected to beinvested by private

requiring largeinvestments in networkinfrastructure

sector out o t e totainvestment need of Rs3,035 bn (USD 74 bn)including MRTS

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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 core1989

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

88


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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

Daljit Mirchandani ,Executive Director, Kirloskar Oil Engines

S. Chatterjee Executive Director, Axis Bank99


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Our Presence

St Petersburg

Krasnodar

Moscow

Branch & Field Offices

Regional Offices

Head Office

58

9

1

SingaporeMauritius

1010


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Business Verticals

g n d u r e u r e a r k

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a

R u r a l

I Q u i

S E Z a n

d E F 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 March 2010

Net Worth (Rs mn.) 9,660Asset Under Management (Rs mn.) 85,650NIM (%) 4.89 %

1212

CAR 17.97%


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Project Financing

Business Overview

Roads Aviation

Ports Telecommunication

Railways Oil & Gas


Net Worth (Rs mn.) 7,901Asset Under Management (Rs mn.) 44,448NIM (%) 4.70%

-

1313

CAR 21.98%


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Advisory Services

Project conceptualization & Pre-feasibility studiesProject Advisory

Project MonitoringInvestment Banking Debt Syndication Equity Syndication Mergers, Acquisitions & Valuations

Fund Management (Venture Fund)


Fee Based Income (Rs mn.) 485

1414

Funds Under Management (Rs mn.) 4,821


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Infrastructure Investments

Overview

nvo ve n ro ec eve opmen s nce as co-sponsors

Development of BOT or Annuity based projects in the sectors like Roads, Power,, , ,

Identify viableprojects under

Bid inConsortium

Support thepartner in

debt Creating

BOT / Annuitymodel partners forthe projects syndication &projectfinancing

SPV

1515


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Infrastructure Investments

SECTOR TOTAL

Fig in Rs Mn

Transportation 2,430

Passive Infrastructure - Telecom 2,590

Port 19

SEZ & Industrial Parks 40

Rural Infrastructure 5

Total* 5,234

1616* Investments held directly or through funds


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Investments in Road Projects

Project Information Under Implementation/Operational Total ProjectCost (Rs. mn) JV Partner/ sSrei's

Holding

4/6 Laning of Bharatpur Mahua, NH-11, Rajasthan 2,979 Madhucon ProjectsLimited 15%

4/6 Laning of Thrissur Angamali, NH47, Kerala 5,650 KMC 49%

4 laning of Madurai Tuticorin, NH-45B, Tamil Nadu 9,200Madhucon Projects

Limited & MadhuconGranites Limited

26%

4 laning of Lakhnadon, NH-7, -Madhya Pradesh /Maharashtra Border 4,891 Sadbhav Engineering 49%

4 Laning of Jaora Nayagaon, Section SH-31, Madhya Pradesh 8,490PNC & SubhasProjects & VIVA

Infrastructure28%

4 laning of Indore Ujjain Road, on SH-27 in Madhya Pradesh 3,417 Galfar and Varaha 48%

4/6 Laning of Gaziabad-Aligarh Section of NH 91 in Uttar Pradesh, 20,180PNC & GalfarEngineering &

Contracting SAOG39%

4 Laning of Rohtak-Bawal section of NH-71 in Haryana 10,500 JMC 49%

TOTAL 65,307Project Information Recently Awarded (LOA Received) Total ProjectCost (Rs. mn) JV Partner/ s

Srei'sHolding

2/4 Laning of Rimuli-Roxy-Rajamunda Section of NH 215 in Orissa 9,000 MBL Infra 50%

1717

an ng o ampur am an sect on o - n ammu as m r , a ar tw

6 Laning of Chandikhole Bhubaneswar Section of NH-5 in Orissa 18,270 Galfar & Simplex 48%

TOTAL 42,270


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Rural IT InfrastructureSrei Sahaj e-Village Limited

A Public Private Partnership to bridge the urban-rural digital divide in India

Settin u Common Service Centres CSCs to offer the followin services:e-governance : Land Records, Registration & Revenue Collection, Electoral Services,

Employment Exchange, Passport, Ration Card, IT Return and otherGovernment Services

e-commerce : B2B and B2C Services (including financial services)

e-learning : Computer Training, Distance English Education, Tuitions / Vocational coursesand other related courses

About 28,000 CSCs in six states:est enga , ttar ra es , ar, ssam, am a u an r ssa

Creating about 28,000 Village Level Entrepreneurs (VLEs)

Direct employment of ~ 84,000 persons (Average of three persons per centre)

Population coverage:300 mn (37% of Indias rural population, 29% of Indias population)*

Technolo artners:Wipro, Oracle, Intel, RedHat and Hughes

1818*Source: based on Press Information Bureau, Report on Rural Development


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Telecom Infrastructure Business

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

In Januar 2009 QTIL and Tata Grou announced an amal amation and artnershi under which:

QTIL and its shareholders would purchase stake in Tata Group company Wireless TTInfoservices Limited WTTIL) from existing shareholders : This was completed in August 2009

, , ,shares in WTTIL would be issued to shareholders of QTIL as consideration

The scheme on the merger has been filed with respective high court(s) and pendingnecessary 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~37000 towers with tenancies of more than 2.0x

,be approx 9%, and which, combined with Sreis holding in WTTIL, would amount to approx 11.50%stake in WTTIL. Total asset size as on March 2010 is estimated to be Rs 92,300 mn

Estimated term loans and borrowings is Rs 55,810 mn as on March 2010

As on 31 st March 2010 total revenues estimated to be Rs 17,000 mn and projected EBITDA is Rs

9000 mn1919


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Construction Equipment Rental Business

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

L&T Finance Limited, which also operates in a similar field in four southern states i.e. TamilNadu, Andhra Pradesh, Karnataka and Kerala.

Has a fleet size of ~700 equipment across 7 locations in India, including earthmoving andgeneral construction equipment, soil improvement equipment, road construction equipment,concrete equipment, transport equipment and lifting equipment

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

Financial Snapshot of FY 10*Details In Rs Mn

forward.

Revenue 398EBITDA 74Asset Base 2,897

Debt 1 792

2020

* Provisional


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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 generationto users by putting together containerized equipment to generate power, heat and coolingsolutions driving reliability and innovation on a 24/7 basis

In addition to equipment, QEPL also provides access to know-how and support through iton-ground personnel who operate the equipment.

Financial Snapshot of FY 10*Details In Rs mnRevenue 317

EBITDA 194Asset Base 1058

Debt 642

2121

* Provisional


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Oil & Gas Infrastructure Business

QOGIL, directly and through subsidiaries and JVs, operates 4 oil rigs and 1 barge (bargeheld through a JV, Quippo Prakash Pvt. Ltd. (QPPL) in which QIEL has an effective stake of

. - ,

operating personnel and know-how

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

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

Financial Snapshot of FY 10*

Details In Rs mnRevenue 354

EBITDA 68

Debt 672

2222* Provisional


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Valuation & Asset Disposal Business

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

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

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, assetmanagement, market commentary etc. for clients

The JV has an e uit base of INR 2 mn and is a fee based business with rovisional

Revenue of INR 32 mn at the end of March 31, 2010.

2323


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Special Economic Zones

Engineering SEZ, Mumbai

development of Engineering SEZ.

It currently owns (approx) 220 acres of SEZ land which is located on Alibaug-Mumbai Road.

Expected to be developed by 2011.

Project specific SPV, set up in partnership with West Bengal Industrial InfrastructureDevelopment Corporation (WBIIDC) for the development of Integrated Industrial Park atKhara ur West Ben al

Industrial Park to focus on automotive industry and related engineering and capital goods

Total project area of 500 acres (Phase I & II)

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Part of Park designated as SEZ for which necessary approvals are obtained from Ministry ofCommerce and State Government


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Synergistic IntegrationSrei +Quippo


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QUIPPO

W orld

e c o m One of the

largest G a s Provides

state-o- c t i o n Provides

equipment on e n t a l

Provides eco-friendly gas- p o

s a

l Provides

online &

Q u

i p p o

T e

l n epen -ent tower company in

the world Q u i p p o

O i l

the-artdrillingequipmentalong with p o

C o n s

t r rentalsalongwithtrained,

qualified & p o E n e r g y based power

solutions for short to

medium term

& A

s s e

t D i s offline

auctioning &disposal

service for 37,000 #telecomtowers

qualifiedoperators Q

u i

operators Q u

i p -basedcombinedheat solutions V a

l u a

t i o n

machinery

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

ComprehensiveRental Company Rental CompanyRental Company Rig Rental Services Equipment & Industrial

Valuer

# 31 st March10

2626


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QIEL An Overview

QIEL primarily acts as the holding company for Quippo Groups businesses ininfrastructure equipment space.

QIEL business structure

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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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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 the

The consideration to the shareholders of QIEL would be through issue of shares in Srei. Advisors KPMG and BDO Haribhakti have, after due analysis, arrived at a share swap ratio of 3:2,

i.e., 3 shares of Srei to be issued for every 2 shares held in QIEL. ICICI Securities has furtherprovided a fairness opinion certifying this ratio to be fair.

Further, Srei proposes to make a bonus issue of 4 equity shares for every 5 equity shares held inthe company by its shareholders, as on the Record Date under the Scheme of Amalgamation. Thebonus shares will be issued to shareholders of Srei prior to Amalgamation. The swap ratio will beadjusted accordingly.

Share issue workings:

Srei Current Shares Outstanding 116 mn

QIEL Expected Shares Outstanding* 109 mnSrei shares outstanding post bonus 209 mnNew issuance at Srei expected due to amalgamation (adjusted swap post bonus) 294 mnSrei shares outstanding post amalgamation, post-bonus 503 mn

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

2929


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FINANCIALS


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Financial Highlights

Rs Million FY10 FY09 FY08 FY07

Srei Infrastructure Finance Limited (Consolidated)

o a ncome , , , ,Profit Before Tax 2,177 1,049 1,528 913Profit After Tax 1,568 826 1,347 846Net Worth 12,792 11,406 7,166 4,999

, , , ,Book Value (Rs.) 110.14 98.20 65.78 45.88

Disbursement 90.168 66,200 57,369 43,045

Total Asset Under Management 1,32,651 1,00,964 82,319 51,498

Rs Million FY10 FY09 FY08 FY07

Total Income 4,701 3,264 5,275 4,001Profit Before Tax 1 481 504 1 133 858

Profit After Tax 1,115 504 1080 793Dividend Rate 12% 10.0% 12.0% 10.0%Net Worth 7,901 6,949 6,581 4,710Borrowings 35,433 13,426 8,942 33,035

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Book Value (Rs.) 68.03 59.83 56.66 43.23Disbursement 30,132 11,010 38,843 43,045Total Asset Under Management 44,448 20,770 16,621 50,825


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Ratio Analysis

FY10 FY09 FY08 FY07

Srei Infrastructure Finance Limited (Consolidated)

Return on Average Net worth 12.96% 8.89% 22.15% 24.45%

Return on Average Assets 2.27% 1.35% 2.53% 2.66%Net Interest. Margin 4.87% 3.10% 3.84% 5.70%

EPS (Rs) 13.42 7.07 12.18 7.76Price Earning Ratio 5.11 7.64 13.83 7.09

Gross NPA (as per FLI) 1.64% 1.33% 1.01% 0.93%Net NPA (As per FLI) 1.02% 0.47% 0.28% 0.19%

FY10 FY09 FY08 FY07Return on Average Net worth 15.02% 7.44% 19.12% 18.10%

Srei Infrastructure Finance Limited (Standalone)

e urn on verage sse s . . . .Net Interest. Margin 4.70% 1.20% 4.80% 5.67%

EPS (Rs) 9.60 4.34 9.91 7.27Price Earning Ratio 7.17 12.45 17.01 7.56

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. . . .Gross NPA (as per FLI) - - - 0.95%Net NPA (As per FLI) - - - 0.19%


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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

srei corporate profile_may 2010

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