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| Gammon Infra may raise Rs 500 cr through QIP |
| Press Trust of India / Mumbai Sep 23, 2009, 21:16 IST |
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Gammon Infrastructure Projects may raise Rs 500 crore through the qualified institutional placement (QIP) route, a top company official said.
The capital outlay of the company's 18 projects would exceed Rs 10,000 crore. The company's projects worth Rs 4,700 crore have already achieved financial closure, while projects worth another Rs 1,250 crore would achieve financial closure by March 2010.
"To part-finance its capex plans, the company had infused Rs 1,900 crore by way of equity and debt. To implement the remaining projects the company would have to raise Rs 500 crore of its own resource towards equity contribution in the SPVs," Gammon Infrastructure Chairman and Managing Director Abhijit Rajan told shareholders at the company's annual general meeting here.
The company intends to enter the capital market at the appropriate time to raise money through the QIP route or any other suitable instrument. The company will actively work on sourcing the funds required to meet the equity requirements of the existing and future projects, Rajan said.
During FY09, the company secured the Godavari Bridge project and the 261-Mw Youngthang Hydro Electric Power project in Himachal Pradesh. In association with Noble Group and MMTC, the company won the Deep Draught Iron Ore Berth project at Paradip Port in Orissa. With these, the company now has a portfolio of 18 projects.
During the financial year 2008-09, the company achieved the financial closure of the Mumbai Offshore Container Terminal in Maharashtra, Rajahmundry Godavari Bridge in Andhra Pradesh and the first biomass plant of Punjab Biomass in Punjab.
The financial closure of Rangit II Hydro Electric project in West Sikkim, Pravara Co-generation Power project in Maharashtra and Paradip Iron Ore bearth project at Paradip Port will be achieved soon, Rajan said.
The year 2008-09 remained difficult year for all industries. "Now, the markets are brighter, especially for the infrastructure sector. The commodity prices have stabilised and there is ample liquidity in the money market," Gammon Infrastructure's Managing Director Parvez Umrigar said.
The government continues to ignore the industry's persistent request to rationalise the tax structure to avoid double taxation of dividends and to grant exemption from long-term capital gains to investment in unlisted shares of special purpose vehicles (SPV), Umrigar said.
In the absence of these, companies would continue to invest horizontally by parking the proceeds of one SPV into another instead of the money flowing upwards into the hands of the holding company. This would be a deterrent from a capital market perspective, he said.
With a view to bring in increased availability of floating stock in the equity market, Gammon Infrastructure has received its shareholders' permission for splitting the face value of its shares from Rs 10 to Rs 2.
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