Srei Infra nosedives 15% after company posts Rs 3,810-crore Q3 loss

NEW DELHI: Srei Infrastructure Finance shares tanked over 15 per cent in Monday’s trade after the NBFC reported a consolidated net loss of Rs 3,810 crore for the December quarter on account of higher and accelerated provisioning as a prudent measure.

The company had reported a net profit of Rs 60 crore for the corresponding period a year ago.

The stock fell 15.47 per cent to hit a low of Rs 6.23 on BSE. The stock later cut losses and was down 5.97 per cent at Rs 6.93.

Revenue from operation plunged to Rs 490 crore compared with Rs 1,450 crore in the corresponding quarter last year.

The company said its total consolidated provisioning was at Rs 3,100 crore for the period and the net worth stood at Rs 296 crore as of the December quarter of FY21.

The Kolkata-based company claimed that the Covid-19 pandemic had impacted its recovery, leading to an asset- liability mismatch.

“The current financial year has been one of the most challenging years in our history of more than three decades… The Covid-19 induced stress on our asset quality coupled with the credit squeeze in the NBFC sector has created an unprecedented situation. As a matter of prudence…we have decided to increase our provisions significantly,” Srei chairman Hemant Kanoria said.

The lender had in November 2020 said a special audit of the company and its subsidiary, Srei Equipment Finance Ltd, was undertaken by an auditor appointed by the Reserve Bank of India. A special audit is typically undertaken if there is a sharp deterioration in the quality of a lender’s book.