“We have built up an asset level of close to Rs 52,000 crore, while we have got almost Rs 11,000 crore of capital and reserves. For any infrastructure company, a debt to equity ratio of three times is normal. Our net debt had moved up from 2.97 times in 2011-12 to 3.54 times in December 2012 and we have brought it down to 3.31 in June 2013. The group debt is quite normal with three times to the equity. In the coming year, it will come down further,” Madhu Terdal, Group CFO, GMR Infrastructure said.
Making a presentation to the shareholders at the 17th annual general meeting here on Tuesday, he said the company had deployed about Rs 15,000 crore of debt in power projects, Rs 9,000 crore in airports and Rs 5,000 crore in the highways and road projects. The company was well positioned to service its debt and had made a strategy to bring it down and increase the capital levels in the year ahead, he said.
“We have abundant cash flows in the airports business which will take care of that debt clearly. In the energy segment, there is a bit of a lag because of the lack of gas and delay in coal allocation. It will start picking up this year. In the highways sector, except for one road project — Ambala-Chandigarh — we are in a very comfortable position to repay our debt,” Terdal said.
In addition, the group has a corporate debt of Rs 3,400 crore, which has been substantially used to fund equity of projects. Much of it will go back to the company as dividend. "”We are divesting some of these assets so that this corporate debt can be reduced. We have a very clear strategy in place to reduce project debt and corporate debt separately,” he said.
GMR’s foreign currency debt is in the order of $1.43 billion. “Our position is nothing to worry about at all. We have a foreign currency debt of $550 million in the Delhi and Hyderabad airports which is completely backed by Dollar revenues. We have no risk at all. About $730 million is in foreign subsidiaries which are again matched by dollar revenues. We have got about $150 million debt taken for our energy projects of which hardly $2 million is due for repayment in the next one year. We are not greatly impacted by the deceleration of rupee at this juncture,” Terdal told shareholders.
With the commissioning of Emco, Kamalanga and Chhattisgarh power projects in the next three years, GMR will have an additional 3,020 Mw capacity operational. This will help the company double its revenues in the next three years from the present level of Rs 10,000 crore, he said.