Srei Infrastructure shares hit lower circuit as RBI supersedes its board; stock down 56% from 52-week high

Srei Infrastructure Finance share price hit a lower circuit of 5 per cent to Rs 8.17 apiece on the BSE during Tuesday's session, as the Reserve Bank of India (RBI) on Monday superseded the company’s board. It will be taken for insolvency proceedings amid governance concerns and payment defaults. 

“The Reserve Bank has today superseded the Board of Directors of SREI Infrastructure Finance Limited (SIFL) and SREI Equipment Finance Limited (SEFL), owing to governance concerns and defaults by the aforesaid companies in meeting their various payment obligations,” it said in a press statement on October 4, 2021.

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The release further added, the central bank also intends shortly to initiate the process of resolution of the above two NBFCs under the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 and would also apply to the NCLT for appointing the Administrator as the Insolvency Resolution Professional

The non-banking finance company’s (NBFC) stock has declined around 56 per cent from its 52-week high of Rs 18.39 per share touched on June 23, 2021. While It had registered a 52-week low of Rs 5.01 per share on March 31, 2021.

The trading volumes on the counter were more-than-doubled, with a combined 885,925 equity shares changed hands on the NSE and BSE in the early morning trade. Similarly, there were pending sell orders for a combined 6.47 million shares on both the exchanges, the data shows. 

As per the June shareholding pattern of the company, the promoters held 60.80 per cent stake in Srei Infrastructure Finance. While, individual shareholders held 28.06 per cent stake out of 38.24 per cent public holding.

“The Reserve Bank of India (RBI) in exercise of the powers conferred under Section 45-IE (1) of the RBI Act, 1934, has issued an Order / Press Release w.r.t. the Supersession of the Board of Directors of Srei Infrastructure Finance Limited as well as Srei Equipment Finance Limited (SEFL), wholly owned subsidiary of the Company with immediate effect,” Srei Infra said in an exchange filing.