The 50:50 joint venture between SREI Infrastructure Finance Ltd and BNP Paribas Lease Group, announced last year, commenced operations yesterday.
BNP Paribas Lease Group, a fully owned subsidiary of the global BNP Paribas group, is focused on equipment financing-related services. The asset finance division of SREI is part of the new entity, which was created through a reserved capital increase for BNP Paribas Lease Group towards its acquisition of a 50 per cent stake in the joint venture whilst SREI remains holder of the remaining 50 per cent of the equity capital.
While the JV will benefit from the goodwill and brand recall created by the SREI name, as well as its leadership in the Indian infrastructure equipment sector, BNP Paribas Lease Group is expected to bring in considerable value addition by way of its global expertise and its association with the largest bank in Europe, by assets under management.
The JV is expected to diversify SREI's current portfolio of infrastructure finance to the fields of agriculture, information technology and medical equipment. Furthermore, this partnership is also expected to result in a reduction in the cost of funding the operations.
The SREI management is quite enthusiastic about this latest development and believes that the JV will benefit all stakeholders, as well as multiplying the group's current asset base into billions of dollars.
Shares of SREI Infrastructure Finance ended marginally lower at Rs.136.95 on the BSE on a day the benchmark indices registered moderate gains.