Srei Infrastructure Finance Ltd has planned to merge with Quippo Infrastructure Equipment Ltd. Quippo Infrastructure was founded in 2002 by Srei jointly with international lenders such as International Finance Corp and FMO of the Netherlands holding 40% initially. It is now the country's biggest infrastructure equipment rental firm.

Srei Infrastructure is a non-banking finance company (NBFC). After the merger the share of promoters will go up from 30% to 46% and about 9.5% of its equity capital will be held by a trust as treasury stocks, or shares owned by a firm itself. Seri has a asset base of around Rs 12,100 crore.

BDO Haribhakti Consulting Pvt. Ltd and KPMG India Pvt. Ltd have prepared a valuation report about the proposed deal which estimates swap ratio at three shares of Srei for every two held in Quippo.

The founders of both the companies were the Kanoria family which currently owns 57% in Quippo while Srei owns 17% and 26% is owned by venture capital funds along with some associates of the family.

Srei has also announced on Thursday that it will allot four bonus shares for every five held. The company wants to widen its capital base to be able to qualify for borrowing more money.

Srei has a paid up equity capital of Rs 116.14 crore and debts amounting to Rs 3,000 crore while its net worth stood at Rs 775 crore.

After the merger the company will offer products and services such as project finance, equipment rental, insurance broking and venture capital through its 20 subsidiaries.

Chairman and Managing Director Hemant Kanoria said, "With the unprecedented growth that we are witnessing in the infrastructure sector, we feel that this step to integrate the businesses of Srei and Quippo would enable us to grow faster."

Srei said that its consolidated revenue in the third quarter grew 46% to Rs 257.19 crore from the same period a year ago and its net profit rose five times to Rs 44.20 crore in the third quarter than in the same quarter last year.

The shares of the company rose 4% to close at Rs 77.55 on the Bombay Stock Exchange on Thursday.