Interview

CEO | SREI EQUIPMENT FINANCE LTD.

DEVENDRA KUMAR VYAS

Q. In 1989, India had not opened up its economy, which during those times, was in doldrums. Then, SREI was born with the aim to address two of the most critical problems in our country then – financing and infrastructure. Why SEFL is one of the best infrastructure equipment finance companies in India and what sets it apart from others?

The clear market differentiator for Srei Equipment Finance Limited (SEFL) has been its holistic approach in providing end-to-end solutions that cover the entire value chain in the equipment life cycle that includes equipment procurement, deployment, maintenance, second life financing, and exit stages. Our partnerships with OEMs are the most distinguishing aspect of our equipment-centric business model. These include various arrangements such as general associations, preferred financier associations and private label associations. Our customer-focused approach also has contributed to our success. We cater to a wide range of customers, from ‘First Time Users’ and ‘First Time Buyers” to fleet owners and mid-size contractors to large corporations and project owners. Supported by our holistic equipment financing solutions approach, our customer-focused approach has helped us retain our customers as their business has grown in size as well as expand our customer base through their referrals.

Our years of experience in the equipment financing business have provided us with deep insight into various equipment categories, diverse geographies and multiple customer segments. Our risk assessment framework and credit appraisal policies are an outcome of this experience, which we have progressively institutionalised. As we continue to diversify our customer exposures, we are scaling up our asset-centric risk approach to cover multi-dimensional risks. We increasingly manage risk by deploying technology including real time equipment location identification through GPS/ GPRS devices, use of handheld devices by field personnel, customer service through online portals, mobile applications and customised risk prognosis tools.

 

Q. SREI Corporate Social Responsibility philosophy encompasses all our stakeholders: customers, employees, society and environment. Why is CSR important for your company and what are your views on doing such things for social awareness?

Srei Group of Companies (SREI) perceives Corporate Social Responsibility (CSR) as a strategic social investment aimed at uplifting the society at large, empowering individuals, making them self-reliant. Our CSR philosophy is embedded in its commitment to all stakeholders - consumers, employees, environment and society while our approach extends both to external community as well as to the company’s large and diverse internal employee base and their families. Our sustainable approach towards practicing humble services to humanity has enabled us to continue fulfilling our commitment to be a socially responsible corporate citizen.

 

Q. There are more investments happening in infrastructure projects. Do you see a demand growth for your products?

The government is working towards enhancing India’s attractiveness as an investment destination. In order to sustain the growth momentum and to create jobs, the government has been proactively spending on infrastructure creation. An estimated budgetary and extra budgetary expenditure of Rs. 5.97 trillion had been finalized for 2018-19 as against an estimated expenditure of Rs. 4.94 trillion in 2017-18, an increase of 21%. Sectors such as railways, roads, highways, and housing and urban affairs have witnessed increased year-on-year (y-o-y) budget allocations for FY‘19 by 22%, 10%, and 57% respectively.

The fact is that there remains a massive sizeable amount of construction work yet to be done in the country, which will call for large volumes of construction equipment. This in turn results in increased opportunities for equipment industry. Thus, demand for financing of such assets is also bound to rise. With GST unifying the Indian market, inter-state mobility of these assets is no longer a problem. Thus, this is the ideal time to promote cost-effective methods of utilisation of these assets like renting and leasing.

According to a report by Feedback Consulting, the construction equipment finance industry is expected to grow at a CAGR of 20-21% for the next three years until Fiscal 2021. With the current announced projects which mostly have started from the third quarter of Fiscal 2018, demand will continue for the earthmoving equipment industry, which will have a share between 68-70% of the overall CME finance market. Banks and NBFCs are expected to have an equal share in the CME finance industry for the next one to two years with the equipment leasing industry expected to grow at a CAGR of 15-16% until Fiscal 2020.

 

Q. Please share your last experience in Bauma? How does Bauma help you in your business growth?

Events like Bauma serve as confluence ground for all industry participants – manufacturers, customers, financiers and regulators. In its fifth edition, this year’s Bauma was bigger and better than its predecessor in terms of sheer size and magnitude with 700 exhibitors from 26 countries and 39,173 participants.

Bauma is an important platform for the industry and forms an important part of the company’s tactical intent. This year Bauma has exceeded our expectations as we witnessed a sizable footfall at our outdoor stall number O.F37.

We offered many attractive products for our customers. We had tie-ups with major manufacturers under which we provided attractive interest rates, moratorium periods and other customised solutions to our prospective customers. We also had an interactive finance game for our customers wherein they could play for loan to value (LTV) or interest rates and win attractive deals.

Apart from regular business offerings, we engaged with our customers and ensured that they had a fun-filled experience through games such as Happy Rainbow Box Game wherein they could collect goodies, take selfies and upload on social media, to win attractive prizes.