News

We hope to provide financing solutions for 500-plus small and large pieces of equipment

December 2016
Stall No.: Outdoor 253
Third time at BAUMA CONEXPO INDIA
Devendra Kumar Vyas, CEO, Financial Services, Srei


In the first half of 2016, the estimated sales of construction equipment increased by between 40 and 50 per cent across manufacturers. “There has been positive traction on ground as far as the infrastructure sector is concerned,” says Devendra Kumar Vyas, CEO, Financial Services, Srei, as he shares more on the company’s offerings at BAUMA CONEXPO INDIA this year.

Leasing—the way forward: In the recent past, we have been focussing on leasing to help us create a new growth driver and emphasise the capital light model in the equipment solutions space. There is a huge potential for equipment leasing in the country. Despite being among the top 10 economies, Indian leasing volume is less than 3 per cent of global volumes. We are ranked outside the top 50 nations while our BRICS peers are all within the top 20 in leasing. The penetration of leasing in the country is also low at less than 3 per cent. Worldwide, leasing has emerged as an important tool for asset creation.

Slowdown in demand in the past and sluggish project execution have affected the cash flows and financial risk profiles of many infrastructure companies. The stress is visible on their balance sheets in terms of high leverage and weak debt protection metrics. Leasing will act as a vital tool for asset creation as it allows the companies to use equipment without leveraging. While the leasing business in India currently suffers owing to several factors, we are hopeful that the upcoming GST will go far in simplifying the tax structure and reducing multiplicity, making leasing an effective financial tool.

At the expo, we plan to offer new leasing-based rental products. In these products, we intend to facilitate the customers with ‘right to use’ the equipment against periodic rentals for an agreed period of time. These rental levels are significantly lower and attractive compared to vanilla loan products. At the end of the period, we also facilitate the customer to renew the lease. A dedicated asset management team will assist our clients across the lifecycle of assets.

Other schemes for the expo: We always follow a customer-centric business model. Our customised financing solutions enrich the customer with better cash flows, extended facility tenure backed by simple documentation and quick processing time. Inspiring these practices, we will provide additional facilities and loyalty programmes like ‘Asset Power’ and ‘Money Power’; wherein the customer is provided additional loan facility, based on past track record, as a top-up funding limit or to buy a particular asset from a partnering OEM. Besides, we will also offer attractive schemes on margins, interest rates, funding of extended warranties or additional features, lifetime tax, etc. These offers can also be bettered by in-stall participation of ongoing flash schemes.

Additionally, for this edition, we are partnering with many globally reputed equipment manufacturers and have come up with exciting schemes for our customers. Among others, we plan to organise ‘Smart Auctions’, which would include reverse auction of interest rates, rental programmes, margin money schemes, etc. Recently, we had launched iQuippo to facilitate buyers and sellers to interact, negotiate and close transactions in a timely, transparent and cost-effective manner. The platform will offer total solutions for construction and mining equipment and provide value-added services like asset certification, valuation, parking, maintenance, logistics, spare parts and manpower.

Expectations from the expo: BAUMA is an important platform for the industry and forms an important part of the company’s tactical intent. We are optimistic about heightened retail and SME buying and with our attractive offerings and strategic tie-ups with our manufacturer partners, we hope to provide financing solutions for 500 plus small and large pieces of equipment.