SREI Infra latest news: RBI supersedes board of SREI Infra

SREI Infra latest news: RBI supersedes board of SREI Infra

Last updated: 06 Oct, 2021 | 06:08 am

SREI Infra latest news: RBI supersedes board of SREI Infra

The RBI has superseded the boards of Srei Infrastructure Finance and Srei Equipment Finance. The central bank said that it was taking this step due to corporate governance concerns and defaults by the two companies. The insolvency proceedings against the two companies will be initiated soon, RBI noted. Here are a few highlights: 

  • Under Section 45-IE (1) of the Reserve Bank of India Act, 1934, the Reserve Bank has the power to supersede the board of the company in case of corporate governance lapses
  • This is the second company after DHFL where the RBI has superseded the board of a company. Piramal group had recently completed the acquisition of DHFL
  • From various top level resignations to debt woes, a lot has happened in SREI infra over the previous month. You can read the detailed analysis here
  • SREI Infra has total liabilities outstanding to the tune of Rs 28,000 crore, which includes Rs 18,000 crore of bank loans and another Rs 10,000 crore of external commercial borrowings and bonds. 
  • In response to RBI’s decision, SREI Infra said that it is “shocked” by RBI’s decision and it will take all necessary measures, as advised by its lawyers. 

SREI Infra: INDmoney Recommendation

  • Since November last year, INDmoney has been advising its investors to exit their investments to the SREI Group. A reminder was sent every time there was a downgrade of the group’s debt profile.
  • Given the latest developments with respect to the company’s debt profile as well as top level exits in the firm, we reiterate that you exit your holdings to the SREI Group. 
  • The latest such advice was sent to our users on September 25th. You can read the details here
  • Going forward, the RBI will shortly initiate the insolvency process against the company. We reiterate that you exit your exposure to this company.