GMR Infrastructure Ltd will need to raise money for new projects in nine months, a top official said on Thursday, after it cancelled its fund-raising plan via qualified institutional placement.
The builder of roads, airports and power projects will need funds for two road projects it is working on as well as any new project it may bid for, A Subba Rao, group chief financial officer told Reuters over the telephone.
GMR Infrastructure raises funds for new projects a year ahead of requirements and, "because of the run-up in the market", decided to raise requirements via QIP, Rao said. But the issue was cancelled because of inadequate response.
"QIP is not the only solution, there are several other capital raising issues, so if it doesn't work out, or if the market becomes favourable, at a later date we may look at QIP itself," he said.
Selling stake in subsidiaries through private equity is one such alternative, he said.
Money for the roads will be needed be in 8-9 months when they reach financial closure. The two road projects cost 30 billion rupees and GMR Infrastructure would need about 7.5 billion rupees ($156 million) for their equity requirement, he added.
The group has around 20 billion rupees of cash, Rao said.
GMR Infrastructure on Monday launched a $500 million share sale amid a flurry of equity offers by Indian firms. But, early on Tuesday, sources told Reuters the firm slashed the offer to $100 million.
Later in the day, sources said the issue was cancelled and the company subsequently told the stock exchange that it has withdrawn its QIP due to market conditions.
"We didn't get the adequate response for our $500 million issue so the reduction wasn't a comforting situation for us, though the bank was advising," said Rao.
"We withdrew because there is no point in raising $100-150 million when the growth capital requirement is higher," he said.
GMR Infrastructure shares ended down 8.79 percent at 141.65 rupees in a Mumbai market that closed down 1.97 percent.
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