London Stock Exchange-listed Infrastructure India plc is considering to move out of the main London exchange to the AIM exchange given its small asset size even as it is raising fresh fund worth £1.36 million through share issue partly to refinance investment in one of its Indian portfolio company’s project that is facing cost overrun.
The investment company focusing on Indian infrastructure assets reported 44% jump in net profit for the year ended March’10 over the year ago period largely attributed to revaluation gains from its two investments in the country.
“We have valued the two investments at a total of £39.6 million compared with £32.0 million at the previous year end. This represents a revaluation gain of £14.2 million over the acquisition cost, and this uplift is the primary contributor to the company’s reported profit in both years since the IPO,” Infrastructure India plc chairman Rupert Cottrell said in his letter to the shareholder.
The investment firm has 6.23% stake in Shree Maheshwar Hydel Power Corporation Limited that was established to own and develop a 400MW run-of-the-river hydroelectric project situated on the Narmada River in Madhya Pradesh. The first of ten 40MW turbines has been delivered and testing and installation is in progress. The project is expected to commence operations during the fourth quarter of 2010.
Its second investment is for 26% shareholding in a toll road in Madhya Pradesh -Western MP Infrastructure & Toll Roads Private Limited comprising development of a 125 km stretch of four lane highway to reduce high levels of congestion experienced on the route previously and to provide further scope for traffic growth. While tolling operations were originally anticipated to commence around April 2010, partial tolling on the first half of the road began ahead of schedule. The second half of the road is expected to begin tolling when the project is complete towards the end of September 2010.
It is this toll road project where the company has had to put in additional £360,000 to maintain its 26% stake to take care of the cost overrun. Due to this the investment firm is facing working capital shortage and is raising fresh funds through issue of around 3 million fresh shares to various shareholders.
The shares are to be placed at £0.44 a piece a discount of over 50% to the latest published NAV per share and a discount of 9.285 to the share price on 22 July 2010 (last date before the agreement of the placement price) and a discount of 11.11% to the share price on 24 June 2010 (last date prior to the date of the additional payment being made to the toll road project). The company is having an EGM on Thursday to approve the proposed issue.
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