GMR Infra to tie up $100 m in 3 weeks

Weeks after Temasek, the Singapore-based private equity giant, invested in GMR Energy, the Hyderabad-based company is in fresh talks to unload stake worth another $100 million, again to a private equity player.

Sources said a  deal would be finalised in the next two to three weeks.

“It may not be Temasek again. But, we can’t disclose the name now. We are in the final stages of closing the deal,” said GMR’s chief financial officer, A Subba Rao.

GMR Infrastructure, the mothership under which GMR Energy is the power vertical, recently raised $315 million through a qualified institutional placement.

The company currently has a power generation capacity of about 823 megawatt (mw). This is expected to go up by about 5,500 mw.

“The average cost per mw particularly when we are planning to use super critical technology is about Rs 6 crore,” Rao told DNA.

“The total cost required for expansion would be in the range of about Rs 33,000-35,000 crore. About 25%  of this would be in the form of equity,” he said.

According to these estimates, the company would require about Rs 8,250-8,750 crore in the form of equity.

The funds already raised including from Temasek too would go towards the equity.

“There is cash already available with the company to the extent of Rs 4,000 crore. The additional funds are now being raised. We have raised funds through a QIP too recently. So, for now the fresh $100 million would be enough. But  if we take up fresh projects, then the fund requirement would change,” he said.

Though it has raised funds from Temasek, the extent of equity dilution is still not known and the same situation would apply to the new private equity investor too.

“The equity dilution would be known only at the time of an IPO. The valuations would be worked out at that point,” he said.