As Hemant Kanoria takes a step towards his younger brother Sunil to adjust his jacket collar before the photoshoot, it speaks volumes about their relationship. You not only sense an easy camaraderie between the two co-founders of Srei Infrastructure Finance Ltd, it is also clear that helping each other put best foot forward comes instinctively to them.
“We know each other’s weaknesses and strengths so well that complementing each other is second nature to us,”
says Sunil Kanoria, Vice Chairman, Srei.
When Brothers Turned Financiers
Based out of Kolkata, the two brothers had founded Srei as a small company in 1989, financing infrastructure projects for which the government released tenders every once in a while.
“The infrastructure sector was in shambles, and there was little finance mechanism to speak of,” says Hemant Kanoria, Chairman and Managing Director, who was only 26 then. He and 23-year-old Sunil had opted out of family business of flour mills, animal feed and market trading to start the new company.
The risk-taking paid off, and today, Srei has a customer base of over 30,000 with over Rs 37,400 crore of consolidated assets under management. It offers a bouquet of services in the infrastructure sector, which include infrastructure project finance, advisory and development, infrastructure equipment finance, alternative investment funds, capital markets and insurance broking.
What has brought Srei where it is today is not only the first-mover advantage. With a keen sense of business and risk assessment, Hemant and Sunil have also been extremely proactive to change, open-minded about challenges and opportunities and flexible in their approach towards market dynamics.
“When we saw there was paucity of financing opportunities in infrastructure, we formed Srei,” says Hemant, adding, “When we sensed the need for infrastructure equipment that companies could take on lease, Quippo was born in 2002.” It is worth noting that Quippo is the country’s largest infrastructure equipment rental brand and services high-growth verticals such as construction, oil and gas, and energy.
Later, the company also started to finance infrastructure projects and today provides debt, equity and mezzanine capital for a host of projects – power, renewable energy, roads, hospitals, bridges, highways, ports, airports, telecommunication, water supply, water and waste management, industrial parks and special economic zones, agro infrastructure, warehousing, and hotels. All this without a road map?
“Our journey has been like the blooming of a flower,” explains Hemant, resorting to a cliché, but one that makes sense when you look at the group’s business growth over the years. “Keeping initial doubts and challenges aside, we realized we were on the right path in the mid 1990s, when the central government was aggressively pushing the infrastructure agenda,” says Sunil, explaining how highways, the Golden Quadrilateral, new airports, and so on were getting attention.
After the company went public in 1992, in 1994, it found strategic equity partners in the form of International Finance Corporation-Washington, FMO-the Netherlands and DEG-Germany.
Adapting to Change
Changing with the times while keeping the company’s interests in mind has also ensured that Srei encourages innovation at workplace.
“We encourage our employees to act like entrepreneurs,” says Hemant, explaining how people are allowed to make mistakes. “But we also urge them to not sweep their mistakes under the carpet,” says the cautious entrepreneur, revealing how there is a strong review mechanism as well. “When we make mistakes, we institutionalize them so that they aren’t repeated,” further says Sunil.
Fine-tuning their skills, the duo is committed to better its risk management, something Srei still needs to ace, the co-founders feel. “Of course, who could have been prepared for a situation where telecom and coal mine licenses were cancelled, but many a time we have gone with mathematical calculations and overlooked the nuances of our client’s business,” says Hemant.
Thus, as a rule now, Srei does not finance a project unless it understands the business and its revenue model. Sensing the immense opportunities in the infrastructure sector, Srei is also ready to empower its employee base to become a stronger force to reckon with. “With time, you understand that if you take care of your people, they take care of you,” says Hemant.
Coming from a Marwari family whose forefathers migrated from Rajasthan to Bihar to West Bengal, the Kanoria brothers sometimes agree to disagree on company decisions, but stand together in harsh days. “Our advantage was that most of our mistakes happened when we were a small company. When you fall from a pedestal, you get away with bruises and scrapes. A fall from the fifteenth floor, however, can kill you,” says Hemant, chuckling.
Today, Srei is among the first Indian nonbanking finance companies (NBFCs) to access the international market for funds and also the first Indian infrastructure NBFC to be listed on the London Stock Exchange. Its other firsts include pioneering to lay the ground for passive telecom infrastructure sharing in India.
The duo is also visibly proud of Srei’s Sahaj e-village, which is aimed at bridging the digital divide between urban and rural India. A network of over 27,000 common service centers in six states, it offers B2B, B2C, G2C and e-learning services to a 30-crore rural population.
“We focus on infrastructure projects that will be used by maximum people,” says Hemant, pointing out why Sahaj is such a favorite, and how the company chooses to invest. For someone who heads a company that has grown with India’s growth story, you know he can’t be wrong.