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Oct 11, 2017 03:15 PM IST | Source: Moneycontrol.com

SREI Infra gains 5% on joint venture with CBL Corp to offer surety & guarantee products

The joint venture company will offer performance guarantees and sureties through bonds to its customers in India for participating in projects in infrastructure and allied sectors.

 
 
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SREI Infrastructure Finance share price rallied 5 percent intraday Wednesday on joint venture New Zealand-based firm for offering surety and guarantee bonds in India.

"Srei Group, part of the Kanoria Foundation, and New Zealand's CBL Corporation have entered into an memorandum of understanding with the intent to form a first of its kind 50-50 joint venture company offering surety and guarantee bonds in India," the company said in its filing.

The joint venture company will offer performance guarantees and sureties through bonds to its customers in India for participating in projects in infrastructure and allied sectors.

"This unique offering will reduce working capital needs of the players and will facilitate project completions without delays, and allow them to develop and grow their businesses," it said.

In developed nations like USA, Canada, Germany, a Bid Bond or surety or performance Guarantee is a part of pre-qualification criteria for bidders, especially for government sponsored infrastructure projects.

In India, the market for such instruments has not yet developed. As of now, only banks provide such instruments in India.

At 14:52 hours IST, the stock price was quoting at Rs 113.30, up Rs 2.05, or 1.84 percent on the BSE.
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