GMR raises $1bn; sells stake to Soros, others

GMR Infrastructure has raised $1 billion by divesting 9% equity through a qualified institution placement (QIP) at Rs 240 a share that values the group at a whopping Rs 45,000 crore.

Billionaire investor George Soros, hedge fund Eton Park Capital Management and Deutsche Asset Management, apart from a clutch of other overseas institutions and Indian banks like SBI and Canara Bank, have picked up the equity.

In the process, GMR Infra also set a record for the biggest such exercise so far by an Indian company, beating the previous high of $520 million by IDFC in last July. “While this clearly proves that the India’s infrastructure sector is hot, it also goes to show that GMR has emerged as the reference stock,” said an analyst.

The fresh capital raised by GMR is also representative of the soaring ambitions of the Indian corporate sector that is looking at investment opportunities across segments. The proceeds, which will go into the group’s plans for a new SEZ at Hosur in Tamil Nadu, the Sabiha Gokcen airport in Istanbul and acquisition of power and coal mining assets, will enable GMR to raise a further $3 billion in debt to take up new projects, Madhu Terdal, CFO, corporate strategic finance, GMR Group, told DNA Money.

“The funds raised through the QIP will be enough to finance our projects over the next 2-3 years,” Terdal added.

The Bangalore-based group has set itself an ambition of emerging a $25 billion conglomerate with interests across verticals in the infrastructure in the next two-three years.

While work on the multi-product SEZ at Hosur spread over 3300 acres will begin soon and will call for an investment of Rs 10,000 crore over the next 4-5 years, the group has identified three coal mines in Indonesia and South Africa for acquisition.

At the same time after the Delhi, Hyderabad and the Istanbul airports, GMR is also aggressively vying for various new airport ventures that are slated to come up for bidding.

While it is in the running for the Amristar and Udaipur airport projects, GMR will also bid for the Navi Mumbai project as and when it comes up, Terdal said.

The group is also reportedly in the running for several power projects along with Macquarie Group of Australia and Kuwait’s sovereign wealth fund for three power companies being sold by the Singapore government.

Clearly, the group, which has emerged an aggressive player in the sector has a huge need for funds in the coming days. The company had launched the offering on December 5, 2007 after the close of the markets in India and was priced on December 10, 2007.

Via DBA