SREI Infrastructure Finance

The Reserve Bank of India superseded the boards of SREI Infrastructure Finance and SREI Equipment Finance in October 2021 after an audit revealed severe governance lapses, siphoning of funds, and mounting liquidity stress. The central bank's order, under Section 45-IE of the RBI Act, was the first time it invoked such powers against a major non-banking financial company since the IL&FS crisis. An administrator was appointed to manage the nearly Rs 50,000 crore combined loan book while a resolution process was initiated under the Insolvency and Bankruptcy Code.

A consortium led by India's National Investment and Infrastructure Fund (NIIF) secured approval from the National Company Law Tribunal in October 2023 to acquire SREI's viable assets. The plan transferred the lending business to a new entity, with NIIF committing equity capital alongside a HDFC Bank-led consortium of lenders. The resolution recovered approximately Rs 55,000 crore for creditors, making it the largest recovery under India's insolvency code for an NBFC.

SREI Infrastructure Finance operated as a systemically important non-banking financial company focused on infrastructure equipment financing and project lending. Its wholly owned subsidiary, SREI Equipment Finance, was India's largest private-sector financier of construction and mining equipment. The group also maintained a presence in infrastructure advisory, insurance broking, and renewable energy financing through additional subsidiaries.

Hemant Kanoria founded SREI in 1989 and remained its Chairman and Managing Director until the board supersession in 2021. The Kanoria family held a controlling stake in the listed entity through promoter-group entities. Following the RBI action, Hemant Kanoria faced legal scrutiny from investigative agencies, including the Enforcement Directorate and the Serious Fraud Investigation Office, for alleged mismanagement of public deposits and bank loans.

The original listed entity, SREI Infrastructure Finance, was delisted from the Bombay Stock Exchange and National Stock Exchange and effectively wound down following the NCLT-approved resolution plan. The viable lending business and equipment-financing book were transferred to a newly incorporated entity backed by the NIIF consortium. The legacy SREI entity no longer conducts lending operations.