You are here: Home » Companies » News
Business Standard

Promoters to infuse Rs 600 cr in GMR Infrastructure

An underpass constructed by GMR Infrastructure that leads to the airport in New Delhi

BS Reporter  |  Bangalore 

Promoters of GMR Infrastructure, led by Chairman G M Rao, are planning to increase their stake in the company by infusing Rs 600 crore through warrants.

The GMR Infrastructure board on Wednesday approved a proposal to issue up to 180 million warrants, entitling up to 18 million shares, under preferential allotment to promoters.

The price will be Rs 30 to Rs 34 a share, the same as in the qualified institutional placement (QIP) GMR launched on Wednesday after market hours. GMR said it hoped to raise Rs 1,200 crore through the QIP route, mainly to strengthen its net worth (debt is Rs 40,000 crore). It will channel a part of the proceeds to a 1,370-Megawatt (Mw) coal power plant it is setting up in Chhattisgarh.

"We have opened the QIP issue for GMR Infrastructure with a minimum size of $200 million and we are getting a good response," a GMR spokesperson said. The company added based on the Securities and Exchange Board of India formula, it had fixed a floor price of Rs 33.14 a share for the QIP and would consider offering a discount of not more than five per cent on the floor price.

Depending on the response, GMR might expand the size of issue.

Based on Wednesday's market capitalisation of Rs 13,175 crore, institutional investors may get a little less than 10 per cent stake, while the promoters may increase their stake by five per cent, against their current holding of about 70 per cent.

To rein in its debt, the company, which straddles infrastructure development across power stations, airports and highways, has been active in the market in the last financial year. In 2013-14, it had released equity of Rs 5,000 crore by shedding various assets.

According to information available, the company is planning a public offer of its power and airports businesses, mainly to give an exit to its private equity investors. Senior management officials of GMR indicated Rs 2,500 crore could be raised through these issues. Even as the company is considering these options, it is exploring monetising its two coal power plants by roping in investors or offloading majority stakes. "We have all the options open before us and depending on the offer we will take a call on how to derive value in our assets," said a management official.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, July 03 2014. 00:41 IST