GMR to come out with IPO to raise Rs 1,200 cr

Bangalore, May 31: The Initial Public Offer of Infrastructure major, GMR Group, to raise around 1,200 crore for funding various ongoing projects, is likely to hit the market late July or early August.

The Group, which had taken up construction of the Greenfield International Airport in Hyderabad, besides modernisation of the Airport in Delhi, had already raised Rs 320 crore with ICICI, chipping in Rs 250 crore at a premium of Rs 251 for a Rs ten share, while other private equity partner, Quantum-M had contributed the rest, Company CFO Madhu Terdal told newspersons here last night.

The price band of the IPO, to be raised through a 100 per cent book building process, was likely to be finalised by the middle of next month, he said, adding that the draft prospectus was currently being scrutinised by SEBI.

Apart from development of airports, the Group, headed by G M Rao, was having interests in power generation units in Tamil Nadu and Karnataka, besides Himachal Pradesh. It was also in road construction business.

He said the Company had also entered into a joint venture agreement with China Light and Power for taking up ultra mega thermal projects of over 4000 MW for which the Union Government had called for bids.

The company intended to use part of the proceeds from the issue for investment in GMR Hyderabad International Airport Ltd (GHIAL), Delhi International Airport, Ambala-Chandigarh Expressway and three other road projects in Andhra Pradesh, the CFO said.

The company, which had a net worth of Rs 810 crore, was having a debt-equity ratio of 75:25 at present and intended to bring it down after this IPO. The Group had a major ownership share in both Hyderabad and Delhi airports and the work was being carried out at a brisk pace. The Hyderabad airport would be ready by 2008. It had a 63.0 per cent share in GHIAL and 51 per cent in Delhi Airport.

Besides repayment of unsecured loans and payment to sundry creditors, the funds from the IPO would be used in the two airports, Ambala expressway and roads projects like Ponchapalli, Jadcherla and Ulundurpet, Mr Rao said.

Giving the breakup on the share allotment, he said 60 per cent had been kept for institutional buyers, 15 per cent for non-retail buyers like corporates and high networth buyers and the remaining would be issued to the general public on retail basis.

''Our USP is that we have a big selling advantage in all the three sectors we are working on like airport development, power plants and road projects,'' the CFO added.

UNI