In order to release capital for lending to used construction equipment and other purposes, Srei Equipment Finance plans to securitise another Rs 800-900 crore of its assets during the current quarter, reports suggest.

The company will focus on financing used construction equipment because growth in sale of construction equipment is slowing. The company feels that used equipment financing has low credit risk and will help the company garner better margins.

The company has already concluded securitisation of assets amounting to Rs 186 crore, media reports indicate. The Rs 186-crore securitisation deal was rated by Crisil to have “the highest degree of safety regarding timely servicing of financial obligations”.

Srei Equipment, which is 50:50 joint venture between Srei Infrastructure Finance and BNP Paribas Lease Group, had securitised portfolio of Rs 4,334 crore in 2011-12.

Securitisation involves pooling of assets and the subsequent sale of the cash flows from these asset pools to investors. It helps redistribute the credit risk and also provides an additional source of funding.