SREI Infra is the top loser on the BSE currently, down 6% at Rs.55 levels. The market is unhappy with the news that BNP Paribas Lease group is picking up a 5% stake in the company in a non-cash deal. In lieu of this 5% stake, BNP will divest its 50% stake in another SREI company - Srei Equipment Finance Ltd (SEFL). This indirect swap deal will convert SEFL – a 50:50 joint venture between Srei Infra and BNP Paribas – to a wholly-owned subsidiary of Srei Infra.  

Our editor, Mr.SP Tulsian has questioned the rationale or rather the wisdom behind this deal of BNP. SREI bought 50% stake from BNP bought at 20% book value, at a “dirt cheap” price, virtually at Rs.60/share while the purchasing price for BNP was at a book value of Rs.377/share. BNP will now transfer 2.98 crore shares of SEFL for 2.51 crore shares of SREI.