GMR in placement parleys with Temasek, Fidelity, Citi

Firm will raise Rs1,200-1,500 crore through issue in June-end/July.

BANGALORE: Bangalore-based GMR Infrastructure Ltd, which bagged the Delhi airport privatisation and modernisation project, is in equity placement discussions with Singapore’s Temasek, and Fidelity and Citigroup of the US.

"The management has to yet to take a call on these placements," a company official told DNA Money.

Meanwhile, the company will be raising around Rs 1,200-1,500 crore through its initial public offer (IPO) expected to hit the market by June-end or first week of July.

GMR, which is currently also developing the Hyderabad International Airport, and has stakes in power and roads projects, has already garnered Rs 320 crore from private equity firms.

"ICICI Venture Fund had placed Rs 250 crore with us at a premium of Rs 251 for a Rs 10 share before we filed the prospectus with the Sebi.

Another Rs 70 crore ($15 million) has come in from a George Soros hedge fund — Quantum M Ltd — at Rs 270 per share," said GMR Group chief finanacial officer (corporate) Madhu Terdal.

The company proposes to sell around 45 million shares of Rs 10 through the public offer, which is being managed by JP Morgan Stanley Securities, DSP Merrill Lynch, SSKI and Enam Financial Consultants. It would constitute 13-69% of the fully diluted post-issue piad up capital of the company.

Terdal disclosed that the company has kept aside 60% of the shares for institutional buyers, 15% for non-retail buyers like corporates and high net worth buyers and the rest (25%) for the retail investors.

The price band of the IPO, to be done through a 100% book building process, is likely to be finalised by mid-June.

Company officials indicated that it would somewhere in the range of what private placement firms were offering (around Rs 260).

Giving a break-up of how the fund would be utilised, a company official, said Rs 460 crore would be used for a 325-km road project, Rs 193 crore for Delhi airport (Rs 90 crore) and Hyderabad airport (Rs 103 crore), Rs 290 for 100% acquisition of GVL Investments that has 9% stake in the Delhi airport project, Rs 55 crore for unsecured loans and rest for general corporate and issue expenses.

"The acquisition of GVL investments gives us a majority stake of 50.1% in the Delhi international airport," says GMR group associate vice-president (strategic finance) Kamalakara Rao Yechuri.

The company, currently, owns assets worth Rs 7,500 crore (excluding Delhi airport). This includes Rs 2,500 crore assets, which are operational, Rs 2,900 crore being implemented and Rs 2,200 crroe under development.

The project portfolio of the company includes four power projects, six road projects and two airport projects.