GMR sells 1.25% stake to Citibank

GMR Infrastructure has sold 1.25 per cent stake to Citibank for over Rs 100 crore barely three weeks before the launch of its initial public issue (IPO).

The transaction, third after similar private placement of shares with ICICI Venture and a George Soros fund, has put the valuation of the company at Rs 7,800 crore. Enam Financial was the advisor to GMR for this deal.

A private equity arm of Citibank has picked up the shares, representing 1.25 per cent stake, at Rs 270 per share, indicating the pricing of the IPO.

Earlier, ICICI Venture picked up 3.89 per cent stake in the company for Rs 261 crore and a George Soros fund acquired 0.89 per cent stake for Rs 75 crore. ICICI Venture bought shares at Rs 261 while the George Soros fund paid Rs 270.

Sources close to the development said Citibank and ICICI Venture paid the same valuation for the company. "However, ICICI Venture had invested when the stock markets were at their peak. Although the markets have been dipping for quite some time, it did not have any impact on the valuation of GMR," a source said.

Buoyed by the deal, GMR decided to go on schedule with its IPO. The company has submitted the red herring prospectus with the capital market watchdog Sebi. The approval is yet to come.

The company has appointed the book running lead managers for the IPO. They are JM Morgan, DSP Merrill Lynch,

SSKI Securities and Enam. The company aims to collect over Rs 1,000 crore through the IPO which would dilute 10-12 per cent stake.