Eyeing new heights

The year 2021 gave numerous ups and downs for the construction equipment and equipment financing industries. When the year comes to an end, the sectors look forth towards infrastructure as the ‘Growth Puller’ for the period ahead.

Sriram of IndusInd Bank: CE finance industry is a competitive marketplace

AG Sriram, Head – Consumer Finance Division, IndusInd Bank, speaks on the current portfolio in relation to construction equipment financing

Bounce back

Construction equipment finance has bounced back after the pandemic-forced lull.

On Sustainable Growth

Devendra Kumar Vyas, Managing Director, Srei Equipment Finance, elaborates on the key factors that drive the growth and the emerging market trends in equipment finance.

CE finance outlook

Financing accounts for approximately 80-85 per cent of the total equipment purchased. In the case of overseas purchases, it accounts for approximately 90 per cent.

Equipment Pulse

With the construction equipment market is on a growth path, Equipment India explores the market scenario of construction equipment and allied products and services.

Equipment finance sector to grow at 19 per cent CAGR

We are the leading financiers in the construction, mining, and allied equipment (CME) sector in India for fiscal 2017 (Source: Feedback Analysis). This sector primarily consists of equipment used for earthmoving and mining, concreting, road building, material handling, material processing and allied activities.

Growth in equipment finance market to continue

There has been a substantial upswing in sales of construction equipment during the last two years, mainly driven by commissioning of major infrastructure projects by the government in roads and other sectors.

On growth Track

The upswing in construction equipment market in the last two years has created new opportunities for equipment finance market. Leading finance players are keen on the growing trend of the infrastructure market in India that has helped the construction equipment market for a turnaround after a rough patch till 2016.

Bauma is an important platform for the industry

Basis various industry reports, In FY16, the disbursement in the construction equipment financing (CEF) industry was Rs 243 billion, down about 5 per cent from Rs 255 billion in FY15. However, In FY17, the CEF industry is expected to have a turnaround and grow about +5 per cent (from -5 per cent in FY 16) and grow about 15 per cent in FY18.

Is the money flowing again?

Tricky times call for strong strategies but the long term prospects are bright for financiers with staying capacity, finds Charu Bahri. Demand for construction equipment finance has been down for the last few years.

Movers & shakers

Srei BNP Paribas raises benchmark rate

The leading infrastructure and construction equipment finance firm Srei BNP Paribas has announced a hike in its benchmark rate by 25 basis points, from 17.75 per cent to 18 per cent, with immediate effect.

SEFC to double disbursements

Shriram Equipment Finance Co (SEFC) has chalked out aggressive growth plans for this fiscal. SEFC, which commenced its operations in October 2011 in the construction equipment finance space, aims to double its disbursements across all states in the country in next 3-6 months. SEFC has already attained a book size of over Rs 3,400 crore and is one of the largest and most profitable NBFC in this segment.

SEFC has already attained the most prominent position in the CE finance space

We have drawn a three-year plan and in the first tranche, we are well on track. The next three years will be a mixed bag of challenges and opportunities and we will capitalise on the same and consolidate our position to be one of the largest NBFCs in this segment, says Akshaya Nayak, Head Administration and Legal, SEFC.

Making It Happen

Shriram Equipment Finance Company caters to every possible segment, contributing significantly to the infrastructure development in the country.

Financing CE sector

Shriram Equipment Finance offers a variety of financial products to conclusively meet the requirement of all customers and manufacturers/dealers in the construction equipment industry.

Srei Equipment Finance to go public

Srei Equipment Finance will convert itself into a public limited firm as it will help the construction equipment finance firm tap funds from retail investors, said DK Vyas, Chief Executive Officer, Srei Equipment Finance. Converting into a public com?pany will help the firm to tap sources like non-convertible debentures, and corporate bonds which will widen its funding base, according to Vyas.

We shall nearly double our net profit and increase asset size by 65% this year

We are certainly one of the largest FTU segment financers in the CE industry and nearly 65 per cent of our book holds FTU and small customers. This originates from our parent company's philosophy of empowering small customers and entrepreneurs, says Pratap Paode, Chief Executive Officer, Shriram Equipment Finance Company.

Financing CE industry

SEFC offers a variety of financial products for the customers in CE industry. Shriram Equipment Finance Company (SEFC) is a wholly owned subsidiary of Shriram Transport Finance Company (STFC), which is the largest NBFC in the country, with assets in excess of Rs 420 billion under management. SEFC caters to the financing needs of all classes of customers in the fast growing infrastructure industry in the country.

A complex growth pattern

Till date, leasing has not been not more than one per cent of the total equipment finance market. However, with the clarity coming about taxation related to leasing and a direct tax code coming up, there is a huge opportunity of revival of this product in the coming years.