GMR Infrastructure Ltd. (GMRI), the operator of India’s biggest airport, is considering listing its airport and power generation units and selling shares to institutional investors as it seeks to reduce debt, people with knowledge of the matter said.
In a first step, GMR plans to raise as much as $200 million through a qualified institutional placement, said the people, who asked not to be identified as the deliberations are confidential. The company would then sell the airports and power units in initial public offerings, they said.
GMR has been selling assets as it tries to cut debt that almost doubled in the four years through March. It joins companies including Reliance Communications Ltd. in seeking to raise money as stocks surge following Narendra Modi’s election victory last month.
The company is working with Axis Bank Ltd., Bank of America Corp., Deutsche Bank AG, JPMorgan Chase & Co. and ICICI Securities Ltd. on the institutional share sale, said the people. GMR shares jumped 70 percent in the past year while the benchmark S&P BSE Sensex index gained 31 percent.
Manish Kalghatgi, a spokesman for GMR, declined to comment. The Mint newspaper on June 16 reported on GMR’s plan to list its power unit and sell shares to institutions. Reuters reported in December that GMR was preparing an IPO for the airport business.
GMR sold its 40 percent stake in Istanbul’s Sabiha Gokcen Airport for 17.4 billion rupees ($290 million) in April. It divested a 70 percent stake in a Singapore power station development to a venture between First Pacific Co. and Manila Electric Co. for S$600 million ($480 million) in March 2013.
Sales at the airport unit rose to $998 million in the fiscal year through March, accounting for 54 percent of GMR’s total revenue. Operating profit increased to $217 million from $198 million a year earlier, data compiled by Bloomberg show.
GMR’s power division boosted revenue to $554 million last fiscal year, while reporting a $73 million loss, the data show. Together, the two units account for 84 percent of GMR’s sales.
The company in April canceled IPO plans for the unit, GMR Energy Ltd., citing “various business reasons.” GMR plans to refile a prospectus for an IPO of the business after finishing the sale of one of its power plants, the people said.
Reliance Communications, backed by billionaire Anil Ambani, may seek about $300 million through an institutional share sale, people with knowledge of the matter said June 10. Idea Cellular Ltd. (IDEA), India’s No. 2 mobile-phone company by market value, raised $507 million in a stock offer earlier this month, data compiled by Bloomberg show.
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