GMR Infrastructure is understood to be giving final touches to raise close to Rs 600 crore through the private equity (PE) route to fund expansion of its highways business.
Investment bankers close to the company indicate a deal is expected to be signed within three weeks. This will facilitate financial closure for the Rs 7,500-crore highway project the Bangalore-based firm won in October, for a 555-km stretch from Ahmedabad to Kishangarh, Rajasthan (about 30 km from Ajmer). The company, according to bidding guidelines, is expected to have the financial closure by March 2012.
A spokesperson for GMR said it was unable to comment on speculative transactions, till these reached a conclusive stage.
GMR Infra’s roads division brings in a tenth of the annual revenue of close to Rs 7,000 crore. It is dwarfed by the airports and power divisions.
| DRIVING AHEAD GMR Infrastructure’s highway projects | ||
| Route/project | Distance | Cost (Rs crore) |
| Operational | ||
| Tambaram - Tindivanam | 93 | 362 (annuity) |
| Tuni - Anakapalli | 59 | 295 (annuity) |
| Pochanpalli | 103 | 704 (annuity) |
| Ambala - Chandigarh | 35 | 499 (toll) |
| Faruknagar - Jadcherla | 58 | 515 (toll |
| Tindivanam - Ulundurpet | 73 | 881 (toll) |
| Under construction | ||
| Hyderabad - Vijayawada | 181 | 2,193 (toll) |
| Chennai Outer Ring Road | 29 | 1,166 (annuity) |
| Hungund - Hospet | 99 | 1,650 (toll) |
| Recently awarded | ||
| Kishangarh - Udaipur - Ahmedabad | 555 | |
7,529 (toll)
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This step to raise PE for roads comes after it raised Rs 1,360 crore for its energy business and another Rs 1,490 crore for the airport business through PE. Global investors such as Temasek, SBI-Macquarie, IDFC, Argonaut, JM Financial and Ascent Capital were part of the earlier fund raise.
“The objective of raising private equity at various vertical holding companies’ level is to empower each of them to address funding issues on their own strength and not always rely on GMR Infrastructure to fund them. It is also to prepare the stage of taking each of the verticals public eventually,” GMR Group officials had earlier said.
Under the roads division, GMR has, apart from the new project, nine others covering 730 km. Of these, six are operational and cover 421 km, spread equally between toll and annuity-based projects. Of the other three which are at the development stage, two are toll ones and the third an annuity contract.