The hiccups in the non-banking sector and the slowdown in the economy have led to a shrinkage of the businesses. This apart, Srei's infrastructure finance business has taken a backseat for a while due to lack of public-private partnership projects in the country.
“There has been an overall slowdown in sale of construction equipment, which decreased by almost 30 per cent between September, 2018 and September, 2019. While we have started seeing a gradual improvement from November, 2019 led by demand from the infrastructure sector we need more momentum. It has definitely impacted our business to a certain extent,” said Kanoria.
At its peak, Srei was doing equipment finance business of around Rs 1,500 crore a month, which has come down to below Rs 500 crore.
“We reviewed and revised our strategy, focused on cost optimisation and capital conservation. Our employee count has reduced by around 800 and now we have a dedicated team of around 1,500 professionals. We are now focusing on equipment financing through co-lending programmes with banks and reducing our infrastructure financing book. By being lean and thin, by using transformational technologies and by putting appropriate risk mitigation engines, we have been able to stay profitable,” said Kanoria.
As on September 30, 2019, the infrastructure lending portfolio (interest earning assets, including loans) of Srei Infrastructure was Rs 12,562 crore. The portfolio of Srei Equipment (gross earning assets, including loans) was Rs 31,692 crore.
“I don't see a further reduction; in fact we have started hiring professionals in areas where we need specialised skill sets. We have already added 30-40 people in last couple of months,” added Kanoria.