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This Company Deviated From Traditional Business to Grow Bigger Srei is now one of India's largest infrastructure equipment company with consolidated assets worth $5.5 billion

By Baishali Mukherjee

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The Srei Group from Kolkata with a total asset value of $5.5 billion has two entities functioning under it, Srei Ventures and Srei Initiatives, and is currently headed by Hemant Kanoria.

Originally from Rajasthan, Kedarnath Kanoria, grandfather of Chairman and Managing Director of Srei Infrastructure Finance Limited Hemant Kanoria, came to Kolkata for studies and eventually settled there. Hemant was born when his father Dr. Hari Prasad Kanoria had just forayed into the family business of flour mills.

"Our family was in flour mills and food agriculture business for a long time. I was given the charge of two flour mills when I was just 17. Simultaneously, he was given the responsibility of managing an animal-feed plant and trading business -- both part of our family's entrepreneurial endeavours," recollected Hemant.

Hemant is also the Chairman of India Power Corporation Limited (IPCL) and is serving as a board member in the Indian Institute of Information Technology (Guwahati), Neotia University and New Delhi Institute of Management.

Encouraging a Spirit of Entrepreneurship

Unfavourable changes in the government policies compelled the family to reconsider the future of the family's flour mill business. In 1989, Hemant and his brother Sunil embarked on a new journey and started Srei, which has now become one of India's largest holistic infrastructure institutions with $ 5.5 billion of consolidated assets under its management.

When Srei started its journey, India was still a closed economy and quality investments in infrastructure projects were unheard of. Better roads, more ports, uninterrupted power supply and rural development were critical for India's economic growth. The government did not have sufficient funds and the need for private investment in this space was never felt more before.

"We realized that to build an institution that will stand the test of time, we must encourage a spirit of entrepreneurship within our organization. Hence, we consciously nurtured an ambience that encouraged free exchange of knowledge and ideas. Many of our path-breaking innovations in the field of financing have resulted from customer feedback and out-of-box thinking," he recalled.

Innovation Key Strength of Srei

Starting as a private financial institution, financing infrastructure equipment, innovation has been the key strength of Srei. The company could survive challenging economic downturns and multiple market cycles working on its innovative ideas.

In 1992, Srei launched its initial public offering (IPO) and was listed on all major stock exchanges. Being an innovator in nation building, Srei quickly became the preferred partner in infrastructure financing. Both global and local corporations, exploring opportunities in infrastructure development in India, wanted to partner Srei.

"We ensure that infrastructure development is not restricted to urban centres alone. One of Srei's initiatives, Sahaj, has created the country's largest integrated rural network with more than 66,000 common service centres, transforming close to 670 million lives in the process," claimed the business magnet.

Srei is no longer just a finance company. It has emerged as one of India's largest holistic infrastructure institutions with presence in almost every segment of the infrastructure sector.

Resilient to the Uncertain and Challenging Environment

While the infrastructure sector has been under stress for the past few years, Srei has been resilient to the uncertain and challenging environment bringing operational excellence in its businesses and maintaining its leadership position in the infrastructure and equipment financing space.

"We have successfully supported our customers by offering them a holistic bouquet of products and services. The government has realized that India needs to build its infrastructure to support inclusive economic growth and is taking steps to bring the sector back on track. Our leadership position, wide network and close customer relationships make us confident about the future opportunities in the space. The consistent quarterly improvement in our profitability makes us confident that the future quarters will also unfold positively for all our stakeholders," informed the baron.

Technology the Essential Driver of Business

The company believes in the use state-of-art technology to expand and strengthen their businesses. In October 2016, the company launched iQuippo, India's first digital marketplace for infrastructure equipment.

"We were also one of the first few players to deploy GPS on the equipment, which we finance. These devices enable us to track the equipment, both in terms of location and usage, and help us take proactive risk-mitigating decisions. We have also introduced live and online auction platforms for infrastructure equipment. We continuously and constantly explore technological innovations to strengthen our business models further," notified the industralist.

Dare to Dream

Hemant stressed that one must dare to dream, be open to ideas, perceive opportunities ahead of others and take wise risks to become a successful entrepreneur. "One common thread binds every entrepreneur -- the joy of creating something new. Entrepreneurship also empowers an individual to give back to the society, both financially as well as in terms of fresh ideas," he wrapped up.

Generation Next

Raghav Raj Kanoria, son of Hemant is the Managing Director of IPCL. It is one of the largest power generation and utilities companies in the country with consolidated, estimated enterprise/asset value of close to INR15,000 crore. "Prior to assuming the post of Managing Director of IPCL, I spent six years in the company working across the distribution, finance, generation, mergers and acquisition verticals, which has provided me with valuable insight into the work and hands-on experience," said Raghav.

The Growth Trajectory

When Raghav joined, IPCL had taken over the distribution business by acquisition of DPSC from the Andrew Yule Group. The group then set up a 95 MW wind power assets and also took over the district franchise of Bodhgaya, Gaya. The company has been in a growth trajectory since then, and has commissioned a solar power plant of 36 MW in Uttarakhand.

"Our objective will be to strengthen the company's leadership position in the power sector and create a 'lateral thinking' organization, which will enable us to capitalise on the present acquisition opportunities in India. Another key focus area for us will be to maximize our shareholders' value through profitable business growth," he added.

Making the Company More Consumer-focused

"At India Power, we are focusing on various customer initiatives, especially to reduce power cost for our customers and provide better customer service. From implementing easier payment mechanisms to 24X7 customer care, we want electricity distribution to be a customer friendly business, rather than a painful experience for them," put forth the scion.

Introducing Changes in the Family Business

"Our family has been in business for over two centuries and has always been encouraging the spirit of entrepreneurship. As a family, we have always been open to changes and introducing new practices. Bringing in new systems and processes has never been a challenge," signed off the third generation entrepreneur.

Baishali Mukherjee

Former Freelancer

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