The Indian Wire » Business » Banks To Classify Rs 35,000 Cr Loan To SREI As NPA
Business

Banks To Classify Rs 35,000 Cr Loan To SREI As NPA

SREI

Rs 35,000 crore loan given to SREI group may be classified as Non-Performing Asset (NPA) by banks by the end second-quarter ending in September, repudiating the National Company Law Tribunal (NCLT) previous order restraining banks from such classification.

“We were expecting SREI to be classified as NPA and, hence, had already started setting aside provisions,” a top banker at a large public sector bank told Mint.

According to Mint, public sector banks such as– Indian Bank and Canara Bank have liabilities of SREI Group of Rs 2,000 crore and Rs 1,200 crore, respectively, whilst private sector ICICI Bank and Axis Bank have exposures to SREI Group of Rs 800 crore each.

Since 2019, the company is undergoing a merger of its two group companies, SREI Infrastructure and SREI Equipment Finance.SREI was given relief by the NCLT in December 2020, when it directed banks and financial institutions not to take coercive action against the business after it contacted the NCLT bench asking for a freeze on coupon payments and a deferral of redemption dates until the merger was completed.

 However, UCO Bank and the Reserve Bank of India filed an appeal at the NCLAT against the judgement.

Meanwhile, SREI Infrastructure Finance is focusing on reducing debt levels by selling off its assets and reducing stress on its books, according to its annual report.

The Kolkata based non-banking finance company (NBFC) is in the middle of raising equity capital from foreign investors. 

In July, the company’s board approved raising Rs 2,500 crore through various ways including qualified institutional placement. Before this, SREI Equipment Finance Ltd, a subsidiary of the firm,  attracted an investment proposal of Rs 4,200 crore from the US- and Singapore-based investors. 

Also,  Srei Equipment Finance Ltd had enticed Rs 4,200 crore investment from the US- and Singapore-based investors.

 

About the author

Harshita Sharma

A financial news enthusiast and a keen observer of the stock market, I bring to you all the updates from the world of business and finance. So, check out my posts and stay tuned with the major (informational) happenings.

Add Comment

Click here to post a comment

Reach out to The Indian Wire!

Want to work with us? Looking to share some feedback or suggestion? Have a business opportunity to discuss?

You can reach out to us at [email protected] and we will get back in minutes.

Like us on Facebook!