Gujarat Pipavav Port IPO subscribed 23%

Gets bids for 2.53 crore shares

Investors put in bids for a total 2.53 crore shares in the initial public offer of Gujarat Pipavav Port by the end of the second day of the bidding for the issue today, 24 August 2010. The IPO was subscribed 23%.



On Friday, 20 August 2010, Gujarat Pipavav Port (GPPL) raised Rs 92 crore by roping in 20 anchor investors. The company is allocating 2.04 crore shares to the anchor investors, which include Government of Singapore and DSP Blackrock Mutual Fund, at a price of Rs 45 a piece. Some other major anchor investors include, HDFC Mutual Fund (MF), Tata MF, Goldman Sachs, Deutsche Securities, JM Financial MF, Axis MF, Credit Suisse Singapore, Canara Robeco MF, Lloyd George Investment, Government Pension Fund Global, International Opportunities Funds - India Equities, P I Opportunity Fund and Amansa Investments.

Integrated port developer and operator Gujarat Pipavav Port has fixed Rs 42-48 per share price band for its initial public offering (IPO). The IPO closes on 26 August 2010.

The public issue consists of a fresh issue of shares aggregating to Rs 500 crore and an offer for sale of up to 1.17 crore shares by the Infrastructure Fund of India and the India Infrastructure Fund.

The company proposes to use the proceeds of the IPO for prepayment of loans, investment in capital expenditure, capital equipment and general corporate purposes.

Gujarat Pipavav Port is the country's first private sector port providing facilities for handling both containers and bulk cargoes. It is promoted by APM Terminals, which is one of the largest container terminal operators in the world and is part of the Denmark-based AP Moeller Maersk Group.

The revenue stream of the company can be broadly divided into income from port services and rental income from premises which are sub-leased by the company. Port services include services for container cargo, dry bulk cargo and LPG cargo and value-added port services, including container freight services.

The principal component of the company's operating revenue is derived from container cargo and dry bulk cargo. Revenue from container cargo consists of container handling charges, berth services, marine services and storage. The revenue from bulk cargo consists of handling and storage of bulk cargo, marine services, berth hire charges, wharfage charges, stevedoring charges and port operation charges. The revenue from LPG cargo consists of marine services and related ancillary facilities, including providing hose pipe connections to the vessels.

GPPL clocked a revenue growth of 31% to Rs 219.12 crore for the ended December 2009 (FY 2009) and an operating profit growth of 246% to Rs 44.06 crore as OPM improved from 7.6% to 20.1%. However strained by higher interest cost and depreciation, the company reported a net loss of Rs 117.67 crore for FY 2009, much higher than a net loss of Rs 67.60 crore for the year ended December 2008 (FY 2008).