GMR Group’s flagship company, GMR Infrastructure is looking at raising Rs 2,000-3,000 crore growth capital, reports The Economic Times. The company may take a private equity route to raise the capital that will be used for bidding for new projects for highways and energy. The bids are expected to happen in the next 6-8 months post the establishment of a new government at the center.
The capital will be raised at the unlisted intermediate holding company level instead of the entity level. The company is in the process of appointing an investment banker. It plans to raise capital before it can start bidding for future projects, though it has Rs 2,000 crore cash in books.
The slowdown in the markets and lower valuations have forced the company to consider options like convertible equity instruments at futuristic valuations. The group also needs funds in the short term for the financial closure of its 1,200 megawatt Chattisgarh power project and for the capex on its recently acquired Indonesian coal mine. GMR had acquired the Indonesian coal mine for $80 million.
The group has also lined up Rs 14,000 crore investments for the next 5-6 years, when all its mega power projects will be ready. GMR Infra pegs its debt at Rs 12,500 crore and its debt: equity ratio at 3:2.
GMR Infra is putting up a greenfield international airport at Hyderabad and is also upgrading the New Delhi airport. Hence it is currently raising Rs 4,000 crore for the modernisation of the Delhi airport. Part of the capitalisation needs for the Delhi airport will be met through land monetisation and ADF (airport development fee) securitisation while the remaining Rs 2,000 crore will be tied up with banks.
The comapny is also undergoing a structural rejig for the creation of intermediate holding companies for all three of its businesses- airports, highways and energy. The assets of each business will then be transferred to these holding companies, making each vertical independent in its funding needs.
Last week the company had tied up funds worth Rs 3,800 crore from a consortium of seven domestic financial institutions for its 1,050 megawatt power project at Kamalanga in Orissa. The consortium was led by IDFC and State Bank of India (SBI) who have committed Rs 700 crore and Rs 600 crore respectively. The remaining funds will be provided by Canara Bank, Corporation Bank, Central Bank of India, UCO Bank and IDBI.
In February, the company had picked up an undisclosed stake in Canada's Homeland Energy Group Ltd. for $28 million.