GMR Infra to infuse Rs 1,700 cr equity into power projects in FY14

GMR Infrastructure Limited, the Bangalore-based infrastructure major, is set to infuse Rs 1,700 crore fresh equity capital in its energy business during the present financial year. The GMR Energy business at present consists of six operating assets with a cumulative capacity of 837 Mw and four generation projects under various stages of construction with an aggregate capacity of 3,788 Mw.

The fresh equity will be infused in three of its projects -- GMR Kamalanga Energy, Emco, Chhattisgarh and transmission projects. "We will infuse Rs 440 crore in Kamalanga, Rs 130 crore in Emco, Rs 830 crore in Chhattisgarh and Rs 15-20 crore in transmission projects this year. We will commission the second and third units of 350 Mw each of Kamalanga project in July and September, and the second unit of Emco in July," Madhu Terdal, Group CFO, GMR Group, said.

The company will use the funds it mobilised through the sale of a 70 per cent stake in GMR Energy Singapore Pte Limited. It had generated Rs 1,231 crore by divesting stake in its Singapore subsidiary. "We have got a major chunk from the Singapore stake sale. The cash realisation is Rs 1,500 crore and we will use these funds towards equity infusion into energy business," Bhaskar A Rao, chief financial officer, GMR Energy Limited, said.

Recently, two units from the ongoing generation projects started commercial operation — one unit of 350 Mw in Kamalanga and one unit of 300 Mw in Warora. With this, GMR’s present operating capacity has reached 1,487 Mw. In addition to this, two transmission projects are in their advance stages of completion. The group has coal mines in Indonesia and India.Terdal said, in line with GMR Group’s ‘Asset light and Asset right strategy’, it is looking at divesting couple of road projects..

"We have received some interest from investors and we are evaluating. There is a restriction on divesting the full stake at this time. We can divest only up to 74 per cent. If there is a policy change, we might consider full divestment. The discussions are at a preliminary stage. It is not proper to put a timeline at this moment. But, I don't say the matter has progressed that we can put some number on the amount being raised," Terdal said.

He said the company is also open for strategic investors for individual power projects if there are good investors available and if they can add significant value into the projects. But the majority control will continue to be with the GMR group, he clarified.

During fiscal 2012-13, GMR benefited from Delhi airport significantly as the government and AERA approved the revised tariff structure. "We began 2013 on a positive note. The government and AERA have approved revised tariff structure. And this has made our revenue go up.

Our tariff petition in the case of Hyderabad airport is still pending and we hope a positive outcome in that," Terdal said.

Traffic at Delhi and Hyderabad airports were flat at 9.3 million and 2.1 million for the fourth quarter and 34.3 million and 8.4 million for the year respectively. In Istanbul airport, the traffic growth of 17 per cent for the quarter from 3 million to 3.5 million and 9 per cent for the year from 13.8 million to 15.3 million.

GMR's bid for the Philippines airport has been shortlisted and the company is looking to invest close to $220 million along with its partner if its bid is accepted later this year. GMR's share in this venture would be in the range of $90-100 million, he added.