Videocon divests equity stake from Gayatri Proj

Mumbai, Sep 20: Videocon Group has decided to divest its equity investment portfolio from the Hyderabad-based construction company, Gayatri Projects that is making an initial public offering of 29 lakh equity shares of Rs 10 each for cash at a premium to be decided through the book-building process.

With the price band for the IPO of Gayatri Projects fixed between Rs 275 and Rs 295, Videocon Group promoted by Venugopal Dhoot and family is set to make a windfall as the latter had invested in the construction company in 1999 at a price of Rs 107 each.

Pointing this at a press conference here today, Gayatri Projects' Managing Director T V Sandeep Reddy said, ''Videocon's investment - having received a bonus of 1:1 shares in the last six years - in the equity worked out to Rs 53.50 each and as against this, Videocon stands to gain by roughly 4.5 times its original investment made in 1999.'' The IPO of Gayatri Projects comprises an offer for sale of 19 lakh equity shares by Videocon Group and a fresh issue of 10 lakh equity shares. The Videocon group's stake sale is being made by Videocon Appliances Ltd and Videocon Industries Ltd.

Replying to a question, Mr Reddy said the money raised from the fresh issue of the company will be invested in a Special Purpose Vehicle (SPV) for execution of the Meerut-Muzaffarnagar project proposed by the National Highway Authority of India sponsored Build Operate, own and transfer (BOOT) project and also for repayment of other debts.

Replying to a question, Mr Reddy said his company has executed several construction projects including 644 km of the highways in the country, other than 1,113 km of irrigation canals and 1,113 km of irrigation canals, besides 21 irrigation projects including Upper Krishna Project.

The book running lead managers to the offer are Allianz Securities and IL&FS Investsmart.

UNI