Srei Infrastructure Finance Limited Public Issue of Long Term Infrastructure Bonds under 80 CCF of Income Tax Act, 1961 Tranche 1 Issue Opens On: December 31,2011 Tranche 1 Issue Closes On: January 31,2012 SREI INFRA TAX SAVINGS BONDS (Disclaimer) The Shelf Prospectus and Prospectus Tranche 1 are available on the Company s website at www.srei.com, on the website of the BSE Limited at www.bseindia.com and the respective websites of the Lead Managers and Co-Lead Managers at www.icicisecurities.com, www.karvy.com, www.rrfcl.com, www.srei.com, www.smccapitals.com and www.bajajcapital.com. Investors proposing to participate in the Tranche 1 Issue should invest only on the basis of information contained in the Shelf Prospectus and Prospectus Tranche 1.
Disclaimer This presentation is in relation to the proposed issuance of Long Term Infrastructure Bonds by Srei Infrastructure Finance Limited ("Company") and should not be construed in any manner as promotion of the Company or any of its products. This presentation does not constitute an offer or invitation to subscribe to or purchase of any securities of the Company and nothing contained herein shall form the basis of any contract or commitment whatsoever. This presentation is being communicated only to persons who have professional experience in matters relating to investments and to persons to whom it may be lawful to communicate it (all such persons being referred to as Relevant Persons ). This presentation is directed only at the Relevant Persons and any investment or investment activity to which the presentation relates is only available to the Relevant Persons or will be engaged in only with Relevant Persons. This presentation is being furnished to you solely for your information and shall not be reproduced or redistributed by you to any other person without prior consent of the Lead Managers. Investors and prospective investors in securities of the Company mentioned herein are required to make their own independent investigation and appraisal of the business and financial condition of the Company and the nature of the securities in order to form their own informed decisions. Certain statements contained in this presentation may be statements of future expectations and other forward-looking statements that are based on third party sources and involve known and unknown risks and uncertainties. Forward-looking statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. There is no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements, which speak only as of the date of this presentation. The contents of this presentation are subject to changes without prior notice. This document is just a presentation and is neither a "Prospectus" (as defined under the Companies Act, 1956) nor intended to be so. Any decision to purchase securities in the context of a proposed offering of securities, if any, should be made solely on the basis of information contained in a prospectus published in relation to such an offering. No representation or warranty is given as to the accuracy or completeness of the information contained herein. By participating in this presentation or by accepting any copy of the slides presented, you agree to be bound by the foregoing limitations. For risk factor and detailed information, please refer to the Shelf Prospectus dated December 28, 2011 ("Shelf Prospectus") and Prospectus - Tranche 1 dated December 28, 2011 ("Prospectus Tranche 1") (collectively, the Prospectus ) filed with the Registrar of Companies (ROC), Kolkata, West Bengal. The Prospectus is available on the websites of Lead Managers: www.icicisecurities.com, www.karvy.com, www.rrfcl.com and www.srei.com; Co-Lead Managers: www.bajajcapital.com, www.smccapital.com and on the website of BSE at www.bseindia.com. All investors proposing to participate in the Public Issue of Long Term Infrastructure Bonds by Srei Infrastructure Finance Limited should invest on the basis of information contained in the Prospectus. Disclaimer Clause of BSE BSE LIMITED ( THE EXCHANGE ) HAS GIVEN VIDE ITS LETTER DATED DECEMBER 28, 2011 PERMISSION TO THIS COMPANY TO USE THE EXCHANGE S NAME IN THIS OFFER DOCUMENT AS ONE OF THE STOCK EXCHANGES ON WHICH THIS COMPANY S SECURITIES ARE PROPOSED TO BE LISTED. THE EXCHANGE HAS SCRUTINIZED THIS OFFER DOCUMENT FOR ITS LIMITED INTERNAL PURPOSE OF DECIDING ON THE MATTER OF GRANTING THE AFORESAID PERMISSION TO THIS COMPANY. THE EXCHANGE DOES NOT IN ANY MANNER: - WARRANT, CERTIFY OR ENDORSE THE CORRECTNESS OR COMPLETENESS OF ANY OF THE CONTENTS OF THIS OFFER DOCUMENT; OR WARRANT THAT THIS COMPANY S SECURITIES WILL BE LISTED OR WILL CONTINUE TO BE LISTED ON THE EXCHANGE; OR TAKE ANY RESPONSIBILITY FOR THE FINANCIAL OR OTHER SOUNDNESS OF THIS COMPANY, ITS PROMOTERS, ITS MANAGEMENT OR ANY SCHEME OR PROJECT OF THIS COMPANY; AND IT SHOULD NOT FOR ANY REASON BE DEEMED OR CONSTRUED THAT THIS OFFER DOCUMENT HAS BEEN CLEARED OR APPROVED BY THE EXCHANGE. EVERY PERSON WHO DESIRES TO APPLY FOR OR OTHERWISE ACQUIRES ANY SECURITIES OF THIS COMPANY MAY DO SO PURSUANT TO INDEPENDENT INQUIRY, INVESTIGATION AND ANALYSIS AND SHALL NOT HAVE ANY CLAIM AGAINST THE EXCHANGE WHATSOEVER BY REASON OF ANY LOSS WHICH MAY BE SUFFERED BY SUCH PERSON CONSEQUENT TO OR IN CONNECTION WITH SUCH SUBSCRIPTION/ACQUISITION WHETHER BY REASON OF ANYTHING STATED OR OMITTED TO BE STATED HEREIN OR FOR ANY OTHER REASON WHATSOEVER Disclaimer clause of the RBI RBI HAS ISSUED CERTIFICATE OF REGISTRATION DATED AUGUST 1, 1998 AND A FRESH CERTIFICATE OF REGISTRATION DATED MARCH 30, 2011 RE-CLASSIFYING OUR COMPANY UNDER THE CATEGORY INFRASTRUCTURE FINANCE COMPANY NON DEPOSIT ACCEPTING. IT MUST BE DISTINCTLY UNDERSTOOD THAT THE ISSUING OF THIS CERTIFICATE AND GRANTING A LICENSE AND APPROVAL BY RBI IN ANY OTHER MATTER SHOULD NOT IN ANY WAY, BE DEEMED OR CONSTRUED TO BE AN APPROVAL BY RBI TO THIS PROSPECTUS TRANCHE 1 NOR SHOULD IT BE DEEMED THAT RBI HAS APPROVED IT AND THE RBI DOES NOT TAKE ANY RESPONSIBILITY OR GUARANTEE THE FINANCIAL SOUNDNESS OF OUR COMPANY OR FOR THE CORRECTNESS OF ANY OF THE STATEMENTS MADE OR OPINIONS EXPRESSED BY OUR COMPANY IN THIS CONNECTION AND FOR REPAYMENT OF DEPOSITS / DISCHARGE OF LIABILITIES BY OUR COMPANY.
Contents 1 Infrastructure Sector Overview 2 Srei Infrastructure Finance Limited - The Issuer 3 Srei Infrastructure Finance Limited Financial Performance 4 Issue Structure 5 Investment Consideration
India: A Fast Emerging Economy The Indian economy is the fourth largest economy in the world based on the purchasing power parity. On Purchasing power parity basis, India s Gross Domestic Product (GDP) is approximately USD 4,447.76 billion. FDI has been recognized as one of the important drivers of economic growth in the country. India's FDI inflows touched USD 37.83 billion in 2008-09, USD 37.76 billion in 2009-10 and USD 27.02 billion in 2010-11 The Planning Commission estimates that approximately `20.5 trillion will be required in the 11 th Five Year Plan. The major contributors are expected to be the electricity, telecommunication, railways roads and irrigation sectors 7000 6000 6586 Sectoral Analysis of Infrastructure Investment # (in ` million) 5000 4000 3000 2000 1000 0 324 1273 3402 1271 2787 406 361 230 69 1021 2008 601 1117 1019 3451 1067 2462 56 90 Oil & Gas Pipeline Electricity (incl. NCE) Roads & Bridges Ports (incl inland waterways) Airports Railways Water supply & sanitation Telecom Irrigation (incl Watershed) Storage Xth Plan (Actual Investments) XIth Plan (Revised Investment Projections) Source : National Commission of Population; Ministry of Statistics and Programme Implementation, India ; Department of Industrial Policy and Promotion Fact Sheet, August 1991 to April 2011
Contents 1 Infrastructure Sector Overview 2 Srei Infrastructure Finance Limited - The Issuer 3 Srei Infrastructure Finance Limited Financial Performance 4 Issue Structure 5 Investment Consideration
Evolution of Srei 2011 Accorded Infrastructure Finance Company status by RBI and Public Finance Institution status by MCA 2010 Synergic integration of Srei and Quippo to create a fully integrated Holistic Infrastructure Institution 2009 Strategic partnership with TATA Group for Passive Telecom Infrastructure business 2008 JV with BNP Paribas Lease Group for equipment financing business 2005 GDRs listed on London Stock Exchange 1997 International Development Institutions IFC, DEG & FMO invested as strategic equity partners 1992 Undertakes Initial Public Offering of equity shares and currently listed on all major stock exchanges BSE, NSE and CSE 1989 Started operations and identified infrastructure sector as the core business 1985 Incorporation
Board of Directors Salil Kumar Gupta* Chief Mentor Hemant Kanoria Chairman & Managing Director Sunil Kanoria Vice Chairman Saud Ibne Siddique Joint Managing Director Shyamalendu Chatterjee** V. H. Pandya* S. Rajagopal* Satish C. Jha* Avinder Singh Bindra* Sujitendra Krishna Deb* * Independent Directors; **Non Executive Director
Introduction Infrastructure Financing Group Shareholding Pattern (September 30, 2011) Our focus on infrastructure funding has given us a deep understanding of this sector, arising from its involvement in a range of projects spanning the infrastructure space and its close association with companies operating in this segment. Strong working relationships with government and other development agencies Our classification as IFC allows us to diversify our borrowings, access long-term funds thereby expanding the financing operations while maintaining competitive cost of funds Consolidated Assets Under Management of over `260,010 million Pan-India presence with a network of 82 offices. We have two offices in Russia involved in leasing of construction equipment FII 14.3% Non Institutions 39.2% Institutions 0.3% Promoter 46.2%
Business Verticals Fund Based Business Fee Based Business Infrastructure Equipment Finance - Srei BNP Paribas a 50:50 JV between Srei Infra and BNP Paribas Lease Group has emerged as one of the major equipment financiers in India by specializing in the infrastructure and construction equipment. Some of the equipment and machineries that Srei BNP Paribas finances include excavators, compactors, dozers, cranes, heavy dumpers, compressors, surface miners, motor graders, backhoe loaders, tool carriers, road building equipment, mechanical and sensor pavers, etc. Project Financing - The project finance segment of our Company provides customized financing to infrastructure projects and their sponsor companies. Infrastructure Project Development - The Infrastructure Project Development (IPD) vertical at Srei sponsors PPP Business in Road sector in our country with a present portfolio of close to 5,000 lane km. International Business Operations The Company has leasing operations in Russia Project Advisory The division of our Company has, through successful implementation of a number of projects, gained professional strength in all major areas of Infrastructure. It provide services in conceptualization of projects, in preparing feasibility reports, detailed project reports and in financial structuring, particularly of different PPP models. Investment Banking - Srei Capital Markets Limited is one of the merchant bankers in India which provides a wide gamut of services from IPOs, Delisting, Buy-Back, Open Offers, NCD / Bond Placement to private placements of Equity, Debt Syndication and M&A Advisory. Venture Capital - One of the venture capital players in the country with primary focus on managing investments in the infrastructure sector. Insurance Broking The Company has expertise in assessing the insurance requirements of large and medium enterprises as well as individuals; recommending to them optimal products available in the market; and ensuring faster settlement of claims. Strategic Investments Our Company s focus on infrastructure funding has given it a deep understanding of this sector, arising from its involvement in a range of projects spanning the infrastructure space and its close association with companies operating in this segment.
Our Key Strengths Composite financial services platform focused on infrastructure Provide financial products and services to our customers engaged in infrastructure development and construction, with particular focus on power, road, telecom, port, oil and gas & SEZ sectors in India with a medium to long term perspective A niche player in the infrastructure space A significant lender in the private infrastructure financing sector Deep domain knowledge in project structuring, appraisal and risk evaluation Customized financing to infrastructure projects and their sponsor companies. Pan- India presence with a network of 82 offices Experienced management team and dynamic professionals Professional team with diverse backgrounds and deep domain knowledge in various sectors Established relationships with government entities & well-developed client relationships Well developed relationship with government entities gives access to major advisory and financing opportunities in the infra sector Few Indian NBFCs to have accessed the International market for funds and get listed on London Stock Exchange Strong asset quality Achieved through comprehensive appraisal skills and disciplined risk management practices
Contents 1 Infrastructure Sector Overview 2 Srei Infrastructure Finance Limited - The Issuer 3 Srei Infrastructure Finance Limited Financial Performance 4 Issue Structure 5 Investment Consideration
Consolidated Financial Indicators (Amount in ` mn) Net worth Total Income 35,000.00 30,000.00 25,000.00 20,000.00 15,000.00 10,000.00 5,000.00 0.00 5,001 7,171 11,468 12,854 30,667 31,644 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Period from Apr to Sept-11 18,000.00 16,000.00 14,000.00 12,000.00 10,000.00 8,000.00 6,000.00 4,000.00 2,000.00 0.00 4,216 8,022 8,523 9,370 16,381 11,011 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Period from Apr to Sept-11 Profit after Tax & Minority Interest 2000 1792 1800 1559 1600 1400 1319 1200 1000 843 800 821 797 600 400 200 0 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Period from Apr to Sept-11 100% 80% 60% 40% 20% 0% Sources of Funds as % of Total Funds 21.67% 66.88% 11.45% 9.78% 12.63% 9.58% 14.59% 69.10% 71.01% 67.07% 66.00% 21.12% 16.36% 23.35% 19.41% FY 2008 FY 2009 FY 2010 FY 2011 For period April-Sep 2011
Consolidated Financial Summary (Amount in ` mn) Particulars H1 FY 12 FY 2011 FY 2010 FY 2009 FY 2008 FY 2007 Balance Sheet Items Equity Capital 5,032 5,032 1,163 1,163 1,163 1,091 Net Worth 31,644 30,667 12,854 11,468 7,171 5,001 Loan Funds (Borrowings) 131,389 100,641 65,696 42,823 55,445 33,468 Investments 20,851 20,314 6,707 4,438 3,219 1,438 Profit and Loss Items Total Income 11,011 16,381 9,370 8,523 8,022 4,216 Interest & Other Charges 6,506 8,292 5,337 5,230 4,599 2,175 Employee, Establishment etc Costs 837 1,234 626 538 450 277 Profit after Tax 797 1,792 1,559 821 1,319 843
Contents 1 Infrastructure Sector Overview 2 Srei Infrastructure Finance Limited - The Issuer 3 Srei Infrastructure Finance Limited Financial Performance 4 Issue Structure 5 Investment Consideration
Issue Structure Issuer Srei Infrastructure Finance Limited ( Company or Issuer ) Instrument & Issue size Public Issue of Long Term Infrastructure Bonds in the nature of Secured, Redeemable, Non Convertible Debentures, having benefits under Section 80 CCF of the Income Tax Act Upto `300 crores (Tranche 1) Credit Rating & Security Cover Use of Proceeds CARE AA by CARE Ratings 1.0 time of the total outstanding amount of Tranche 1 Bonds Funds raised through the Issue of Tranche 1 Bonds will be utilized towards Infrastructure lending as defined by the RBI in the regulations issued by it from time to time and in accordance with the statutory and regulatory requirements of SEBI, RBI and Ministry of Finance Issue Period December 31, 2011 to January 31, 2012 Listing BSE Limited The Tranche 1 Bonds are subject to statutory lock-in for a period of five years from the deemed date of allotment. No trading would be permitted in the Tranche 1 Bonds during the said lock-in period Lead Managers Co-Lead Managers
Issue Structure Series 1 2 3 4 Face Value per Tranche 1 Bond `1,000 `1,000 `1,000 `1,000 Minimum Application Minimum application for 1 (One) Tranche 1 Bond and in multiples of 1 (One) Bond thereafter Frequency of Interest payment Annual Cumulative Annual Cumulative Buyback Facility Yes Yes Yes Yes Buyback Date One date, being the date falling five years and one day from the Deemed Date of Allotment One date, being the date falling five years and one day from the Deemed Date of Allotment One date, being the date falling five years and one day from the Deemed Date of Allotment One date, being the date falling five years and one day from the Deemed Date of Allotment Buyback Amount* `1,000 per Tranche 1 Bond and accrued interest calculated from the last interest payment date to the Buyback Date `1,531.58 per Tranche 1 Bond and interest on Application Interest compounded annually at the end of five years `1,000 per Tranche 1 Bond and accrued interest calculated from the last interest payment date to the Buyback Date `1549.24 per Tranche 1 Bond and interest on Application Interest compounded annually at the end of five years Interest Rate p.a. (%) 8.90% p.a. 8.90% p.a., compounded annually 9.15% p.a. 9.15% p.a. compounded annually Redemption/Maturity Date One date, being the date falling 120 months from the Deemed Date of Allotment One date, being the date falling 120 months from the Deemed Date of Allotment One date, being the date falling 180 months from the Deemed Date of Allotment One date, being the date falling 180 months from the Deemed Date of Allotment Maturity Amount `1,000 per Tranche 1 Bond and accrued interest calculated from the last interest payment date to the Maturity Date `2346.73 per Tranche 1 Bond and interest on Application Interest compounded annually at the end of ten years `1,000 per Tranche 1 Bond and accrued interest calculated from the last interest payment date to the Maturity Date `3718.40 per Tranche 1 Bond and interest on Application Interest compounded annually at the end of ten years Yield on Maturity* Yield on Buyback* 8.90% p.a. 8.90% p.a. 8.90% p.a., compounded annually 8.90% p.a., compounded annually 9.15% p.a. 9.15% p.a. compounded annually 9.15% p.a. 9.15% p.a. compounded annually *The yield on the Tranche 1 Bonds(to be paid by the Issuer shall not exceed the yield on government securities of corresponding residual maturity, as reported by FIMMDA, as on the last working day of the month immediately preceding the month of the issue of the Tranche 1 Bonds.
Returns on Investment Series 1 2 3 4 Interest rate 8.90% p.a. 8.90% p.a., compounded annually 9.15% p.a. 9.15% p.a., compounded annually Frequency of interest payment Annual Cumulative Annual Cumulative Buyback date One date, being the date falling five years and one day from the Deemed Date of Allotment One date, being the date falling five years and one day from the Deemed Date of Allotment One date, being the date falling five years and one day from the Deemed Date of Allotment One date, being the date falling five years and one day from the Deemed Date of Allotment Tax Rate Tax Benefit adjusted rate of return on Maturity (with Tax Benefits up to `20,000 per annum u/s 80CCF of the Income Tax Act, 1961) 10.30% 10.62% 10.09% 10.55% 9.94% 20.60% 12.64% 11.44% 12.21% 10.84% 30.90% 15.07% 13.00% 14.24% 11.87% Tax Rate Tax Benefit adjusted rate of return on Buyback (with Tax Benefits up to `20,000 per annum u/s 80CCF of the Income Tax Act, 1961) 10.30% 11.74% 11.29% 12.01% 11.55% 20.60% 15.05% 14.04% 15.35% 14.30% 30.90% 19.01% 17.26% 19.33% 17.52%
Contents 1 Infrastructure Sector Overview 2 Srei Infrastructure Finance Limited - The Issuer 3 Srei Infrastructure Finance Limited Financial Performance 4 Issue Structure 5 Investment Consideration
Benefits of Investment in Srei Infrastructure Bonds FY 12 Tranche 1 Income Tax Deduction Investors will be eligible for a deduction of `20,000 for the financial year 2011-2012 since the Bonds are issued under terms of Section 80CCF of the Income Tax Act, 1961 This deduction is over and above Rs. 100,000 deduction available under Section 80C, 80CCC, 80CCD read with Section 80CCE of the Income Tax Act, 1961 Return The Tranche 1 Bonds offer coupon of upto 9.15% per annum for Series 3 and Series 4 Bonds Security Exclusive charge on specific receivables of the Company with an asset cover of 1.0 time of the total outstanding amount of Tranche 1 Bonds. Liquidity Buyback option is provided to the Investors by the Company post the Lock in Period Tranche 1 Bonds will be listed on BSE and Investors can trade post the Lock in Period. Trading will be in dematerialized form only Mortgage Investors can mortgage or pledge the Tranche 1 Bonds post the Lock in Period of 5 years Mode of Allotment The Tranche 1 Bonds will be issued in physical form or dematerialized form for the convenience of the Investors TDS No TDS will be deducted by the Company for Tranche 1 Bonds held in dematerialized form
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