GMR group lines up Rs 1,200 crore IPO

The GMR group has announced plans to enter the capital market by June end to raise between Rs 1,200 crore and Rs 1,500 crore through an initial public offering (IPO) to finance its all ongoing and future projects.

The power and infrastructure major has filed a draft prospectus for its IPO with the Securities Exchange Board of India (Sebi).

"We intend to go with the issue either by June-end or early July through the book-building process after obtaining the requisite Sebi clearances," GMR Chief Financial Officer Madhu Terdal told reporters on Wednesday.

The company intends to use part of the issue proceeds for investments in GMR Hyderabad International Airport Ltd, Delhi International Airport Private Ltd and four expressways.

Another portion of the fund will go towards the repayment of unsecured loans (Rs 56 crore), payment of sundry creditors and for general corporate purposes.

"About Rs 299 crore will be used to pay for the acquisition of 100 per cent equity stake in GVL Investments Ltd, which holds 9 per cent stake in the Delhi airport. The acquisition of GVL Investments will enable us to acquire a majority stake (50.1 per cent) in the Delhi airport," he said.

Infrastructure projects to be funded are: the 35-km Ambala-Chandigarh road on the Delhi-Chandigarh highway (NH 21/22) at an estimated cost of Rs 100 crore; the 86-km Pochanpalli state highway from Adloor Yellareddy to Kalkallu in Andhra Pradesh (Rs 119 crore), the 46-km Jadcherla state highway from Faruknagar near Hyderabad (Rs 94.8 crore) and the 73-km Ulundurpet state highway from Tindivanam in Tamil Nadu (Rs 145 crore).

Institutional investors such as ICICI, Quantum M Ltd of George Soros and IDM of Infrastructure Development Finance Company hold a minority stake in the GMR group holding firm.

"We have already raised Rs 325 crore in the first round of funding in which ICICI paid Rs 260 crore for 4.2 per cent equity stake (95 lakh shares) and Quantum paid Rs 65.5 crore at a premium of Rs 260 for Rs 10 per share. Another 4.15 per cent stake was picked up by IDM in the second round of funding," Terdal added.