The promoters of GMR Infrastructure are understood to be closing in on a deal to raise Rs 650 crore, to be used to repay part of the debt they have raised.
The promoters, who hold a little over 71 per cent stake in the publicly-held company, based in this city, have pledged as much as 30 per cent of their holding with various financial institutions. The aim was to raise debt over a period of time and fuel growth of the company, now with a top line of Rs 6,500 crore.
“The promoters have almost finalised a deal to raise Rs 650 crore to pay back the debt raised from IDFC, due by this June. Post this step, the promoters’ pledging of their holding will be down by around four per cent from the current a little over 30 per cent,” a senior management official told Business Standard.
When asked, an official spokesperson of GMR Infra declined to comment. The promoters’ led by G Mallikarjuna Rao, chairman, have over recent years been investing heavily in building highways, power plants and airports. This catapulted GMR to among the top infrastructure developers in the private sector, riding on public-private partnerships.
“We will have to keep raising debt to fuel our equity portion into the company, which will enthuse financial institutions to lend for long-gestation infrastructure projects. The pledging of our shares is part of that process and we are not unduly worried on this aspect, as long as we are delivering on the projects,” another official close to the GMR promoters told Business Standard.
GMR Infra has 16 power generation assets. Five of these are operational and 11 are in various stages of implementation. Of 10 road assets, six are operational and four under construction. In the airports sector, it has developed and commissioned the new international airport at Hyderabad, rebuilt and expanded the one at Delhi, and at Istanbul, Turkey. It has also recently acquired charge of the operations and revamp of Ibrahim Nasir International Airport, Male (Maldives).
Even as the promoters are taking the step to reduce their pledging of shares to an extent, GMR Infra is also looking at reduce its gearing. This is at 2.5 times, on net debt of Rs 23,000 crore. “Most of the debts are at project level and have been adequately ring-fenced. The cash flows from the projects are sufficient to meet the payback requirements,” senior finance officials of GMR Infra have been maintaining.
However, performance in recent quarters has been under severe scrutiny, with analysts questioning how GMR Infra will be able to deliver. “There has been a drop in their net profit for the past few quarters, with one reason or the other. While for one quarter it was reduced availability of gas to fuel their power project, for some other quarters it was the pending approval from a central authority to raise development fee at the Delhi airport,” said an analyst at a foreign brokerage.
The management of the company had recently told Business Standard they may look at a bond issue of up to Rs 3,000 crore, to refinance debt.
