Private port developer and operator Gujarat Pipavav Port Ltd (GPPL) today said its proposed Rs 500-crore initial public offer (IPO) is likely to hit the capital market soon.
A part of the proceeds will also go towards infrastructure development after the company completes its first phase of expansion worth Rs 1,600 crore.
"We are hopeful to hit the market very soon subject to regulatory approvals by Securities and Exchange Board of India (SEBI). As per the DRHP filed with the capital market regulator, about Rs 120 crore of the IPO proceeds will be utilised for infrastructure development," APM Terminals Pipavav Managing Director Prakash Tulsiani said.
GPPL, is the developer and operator of APM Terminals Pipavav, located in the Saurashtra region of Gujarat and has ambitious plans to compete with major public and private ports in the west coast, including state-run Jawahar Lal Nehru Port Trust and Adani's Mundra port.
The public issue of stocks of Rs 10 each would be based on 100 per cent book building process and includes a reservation of shares worth Rs 10 crore for the company's eligible employees, according to the Draft Red Herring Prospectus (DRHP).
Tulsiani said Rs 300 crore from the IPO proceeds will go for re-payment of loans, borrowed for ports expansion plans. "In fact we had planned the IPO sometime back in 2008 but the same could not materialise as the markets crashed due to the global economic meltdown," he added.
Tulsiani said given the strategic location of APM terminals Pipavav near the entrance of the Gulf of Khambhat and the substantial increase in maritime trade, it is ready to serve the growing demand of the landlocked northern and south-western regions of the country.
"We are eyeing to increase cargo volumes and are hopeful of attracting a big chunk of cargo going to JNPT and Mundra ports with our facilities, good road and land connectivity and strategic location," he said.
GPPL is principally engaged in providing port handling and marine services for container, bulk and LPG cargo and is promoted by APM Terminals, which owns 57.9 per cent equity interest in the company.
APM Terminals is a part of Denmark-based AP Moller-Maersk Group--one of the largest container terminal operators in the world with a global network of 49 terminals in 32 countries.
It handled 2.38 million tonnes of bulk cargo and 0.13 million TEUs (twenty-foot equivalent unit) of container cargo in the nine-month period ended September 2009.
GPPL has the exclusive right to develop and operate APM Terminals Pipavav and related facilities till September 2028.