GVK likely to raise Rs 4,000 crore for the airport vertical

May file draft red herring prospectus for the proposed IPO in a week or two

Hyderabad-based infrastructure major GVK Power and Infrastructure Limited is mulling over raising about Rs 4,000 crore from capital markets for its airport vertical.

The company is expected to file the draft red herring prospectus for the proposed initial public offering (IPO) of GVK Airport Developers Private Limited in a week or two, sources said.

Since March this year reports about the company's ongoing plans for the IPO were doing the rounds hinting at an offer size of about Rs 2,500 crore. “But what the company was planning to raise was up to Rs 4,000 crore. They were also talking to investors for private placement,” sources in the know said.

When asked about the IPO plans, company's Chief Financial Officer A Isaac George refused to comment either on the size or its timing.



While the company continued to report losses quarter after quarter on account of fuel issues being faced by its power division, the airport business of the company was progressively doing well on the back of Bengaluru and Mumbai airports. The company is now going for an expansion of the Bengaluru airport as things started looking up.

GVK is also one of the four companies, which were short-listed for the development of the Navi Mumbai airport project along with GMR and Tatas. Besides this, the company had already signed a term sheet with the Indonesia government to develop a new airport project in addition to its existing operations at Bali.

While the company's consolidated debt is around Rs 25,600 crore, the airport holding company’s debt is about Rs 3,500 crore. Company officials said their endeavour has been to reduce the overall debt by 4,000 crore by monitising some of the assets at right valuations and through which they hope to reduce the interest burden of about Rs 150 crore a quarter.