Srei Equipment Finance (SEFL), which is undergoing the corporate insolvency resolution processes, saw robust cash recovery and upgradations from bad loans accounts of Rs 2,309 crore in the third quarter. The company, a wholly owned subsidiary of Srei Infrastructure Finance (SIFL), is hopeful of surpassing the third quarter’s recovery and upgradation amount in Q4 as loan delinquencies are coming down.
Insolvency proceedings against SIFL and SEFL commenced from October last year after the insolvency petitions, filed by the Reserve Bank of India, had been approved by the Kolkata bench of the National Company Law Tribunal (NCLT).
Buoyed by the improved recovery and upgradations made by SEFL, Srei Infrastructure Finance posted a consolidated net profit of Rs 69.82 crore in the third quarter, against a consolidated net loss of Rs 1,968.26 crore in the second quarter this fiscal. Net loss had stood at Rs 3,810.93 crore for the third quarter last fiscal.
The RBI-appointed administrator has taken initiatives for changing the compliance policy and IT policy, among others. A good risk management framework has been made. And based on it, the companies have started working. The fate of the companies has been changed from non-compliant to fully compliant,” company sources told FE.
Rajneesh Sharma, former chief general manager of Bank of Baroda, took charge of the companies after the RBI had heavily come down on them over governance issues and superseded the boards of directors in October.
All the upgradations from the bad loans accounts have been done based on the RBI’s new NPA norms, although there is more time to implement those. Under RBI’s strict guidelines, the company has made this recovery,” sources said. A mail sent to Sharma went unanswered till the time of going to press.
As of January 31, 2022, the administrator admitted total claims of Rs 22,964.64 crore of commercial banks on SIFL and SEFL, against the combined amount of Rs 25,115.29 crore claimed by lenders.
Financial Express is now on Telegram. 
