GVK Power and Infrastructure is weighing options to raise funds from private equity investors for its roads business following strong interest from some players, a senior official said on Monday.
“There is always this possibility of bringing in private equity investors into the transportation vertical, now that we have roughly about 600-plus line kilometers,” Chief Financial Officer Isaac George told reporters in an earnings conference call.
“There has been a lot of interest that has been shown by a couple of private equity investors to come into the transportation vertical, but we have not taken a call,” he said.
Last year, the company raised Rs 14.98 billion in its energy business by roping in private equity players 3i India Infrastructure Fund, Actis Infra and Singapore Investment Corp.
The company expects to soon get another highway project in its roads business, which accounted for most of its profits in the April-June quarter, George said.
On Saturday, the company reported a 77 per cent increase in consolidated net profit to 589.2 million rupees on a net sales of Rs 6.1 billion.
Road projects contributed 34 per cent of the firm’s consolidated profits and 8 percent of revenue for the quarter.
The firm expects its Deoli-Kota expressway to be completed ahead of schedule — in two years instead of the earlier scheduled 50 months, he said. It has raised toll rates for its Jaipur-Kishangarh Expressway by little over 10 per cent from July 1.
“With these four projects — the existing operating projects and the two under construction — and one which we are about to receive the LoA (letter of award), GVK will have about 606 line kilometers of projects.”
The firm, which has interests in airports, roads and energy, is in exclusive negotiations with Australia’s Hancock Prospecting for buying two coal mines. It will not raise any debt on its own books for the purchase, he said.
GVK group and Hancock have extended the deadline for exclusive talks for a third time until end-August due to differences over valuation, sources had told Reuters.
The company expects the financial closure for its 800-megawatt hydro power project in the state of Jammu & Kashmir by March 2012, George said.
The monetisation of about 3 million square feet of real estate at 37 per cent-owned Mumbai International Airport Ltd will proceed after receiving clearances from regulators and hopefully will begin in FY12, he added.
Shares in the firm, valued by the market at $610 million, have shed 56 per cent so far in 2011, while the benchmark fell 17 per cent.
On Monday however, shares rose as much as 6.3 per cent, cheering the quarterly numbers. They came off highs in a market rattled by global economic worries to end 2.91 per cent up at Rs 17.70 in a weak Mumbai market.