GMR Infra may raise $3 billion

GMR Infrastructure, which sold shares to billionaire George Soros and Citigroup Inc in December, plans to raise $3 billion (Rs 12,000 crore) over "four or five years'' to help fund expansion of power projects.

The Bangalore-based company, with interests in power plants, airports and roads, might raise about $2 billion through debt and $1 billion from equity markets to help increase its power capacity six-fold, GMR Group Chief Financial Officer Ashutosh Agarwala said.

Agarwala took over as CFO seven months ago. GMR Infrastructure, Reliance Power and Tata Power are increasing generation capacity as power shortage is rampant in the country.

"India is the place where investments should be done, this is the place that is growing,'' he said. "The rates being offered on foreign-currency loans to me are slightly higher than what they were a few months back.''

Agarwala declined to provide details of the sales. GMR Infrastructure had $2 billion of debt as of February 29, of which 7 per cent is in foreign currencies, the company said.

"The appetite for long-term debt has gone down,'' said Ajay Mahajan, head of financial markets at Mumbai-based YES Bank. "It is just not the pricing, but availability, which is getting tougher.''

Power capacity
GMR Infrastructure plans to develop more than 4,340 mw of power generation capacity over the next five years, to add to its existing 800 mew of capacity. The company is building two power projects in Orissa and a plant in Chhattisgarh. Each plant will have a capacity of 1,050 mw.

Power companies including Emmar MGF Land and Wockhardt Hospitals scrapped planned share sales in March after concerns about a US economic slowdown triggered a sell-off in global equities.

The Sensex, the worst performing among the global primary stock indexes, has dropped 23 per cent this year.

GMR Infrastructure raised $1 billion selling shares to Soros, Citigroup, T Rowe Price Group Inc and 46 other investors at Rs 240 apiece in December. The stock has since fallen 39 per cent.

US stake
The company was considering buying a stake in Massachusetts, US-based power producer InterGen, Agarwala said, without giving more details.

GMR Infrastructure will bid for a 50 per cent stake now held by an American International Group Inc fund, according to a news report. Ontario Teachers' Pension Plan controls the rest of InterGen.

India produces 128,182 mw of electricity and plans to add about 79 gigawatts of power capacity by FY12.

GMR Group in 2001 combined all its power projects under GMR Energy.

The group might separate its other business units into individual companies and list them, Agarwala said. "We don't rule out having separate independent entities for each of the business, which could themselves be fund-raising vehicles,'' he said.

The group manages New Delhi and Hyderabad airports in India and is building a second terminal at Sabiha Gokcen International Airport in Istanbul, Turkey.

GMR Infrastructure also plans to bid to manage New Delhi railway station and the rights to run freight trains between the capital and Mumbai and Kolkata once the government calls for offers from non state-run companies.

The company is negotiating with overseas companies for a possible partnership, he said, without providing details.